NAIC Reasserts Its Opposition To Association Health Plans
Fending off criticism that they had veered from their stance opposing association health plans, state insurance regulators reiterated their opposition to these plans.
The restatement of its position by the National Association of Insurance Commissioners, Kansas City, Mo., followed concerns raised during the spring NAIC meeting last month that written remarks presented by an Arkansas insurance regulator during testimony before Congress, supported AHPs.
What also was voiced during the spring meeting was the general opposition of consumer advocates, insurers and regulators to plans they claim would be costly and anti-consumer.
“It will have a devastating impact on the small group health market,” said Joan Gardner, executive director for state services with the Blue Cross/Blue Shield Association, Washington, during the NAIC meeting. One reason for this, she explained, is that they will make health insurance even more expensive than it is now.
State regulation would be replaced by oversight by the Department of Labor, which does not have the resources to ensure that AHPs are properly regulated, she continued.
Additionally, the point was raised that prompt pay laws and laws that provide for “fair competition in the marketplace would not be there under federal regulation.”
“AHPs are not a magic bullet for containing health care costs,” said John Nelson, a member of the executive committee of the National Association of Health Underwriters, Arlington, Va.
But for employers who are desperate to find a way for their employees to receive health care, they could join, he added.
Consumer advocates are also not enamored of AHPs. They do not help the uninsured, many of whom are women, says Alice Weiss, director of health policy with the National Partnership for Women & Families, Washington.
A study by the Congressional Budget Office found that only 330,000 uninsured people were able to be insured because of AHPs, she said. And, there is actually a good chance that they will hurt the market because they make it possible to avoid state benefit mandates, Weiss said.
During the NAIC meeting, Weiss applauded the NAIC for its opposition to AHPs but expressed concern that written testimony presented to the Small Business Committee of the U.S. House of Representatives would send a mixed message about the NAICs opposition.
She said the testimony, presented by John Hartnedy, deputy commissioner with the Arkansas insurance department, could be construed as support by regulators for AHPs.
Weiss said that not only did the written testimony vary from the NAICs position but, in addition, that the “Arkansas insurance staff negotiated directly with the Bush administration” on the issue.
It was a statement that Mike Pickens, Arkansas insurance commissioner and president of the NAIC, challenged in a letter dated March 14.
Weiss said the situation raised the need to make sure that the testimony of state insurance regulators is thoroughly vetted by the organization on issues on which the NAIC has taken a position.
In response, Joel Ario, NAIC Secretary-Treasurer and Oregon Insurance Administrator, said the NAICs position is clear: It is opposed to AHPs.
Indeed, the NAIC sent letters to Congress in mid-March opposing both a House bill, H.R. 660 and Senate Bill, S. 545.
The letters cited the likelihood of cherry-picking, the possibility of inadequate capital standards and solvency requirements, the elimination of state consumer protection laws, and the possibility of sidestepping state benefit requirements.