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NCOIL Newsletter Looks At Association Health Plan Proposals

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NU Online News Service, May 23, 2003, 4:25 p.m. EDT – The National Conference of Insurance Legislators, Albany, N.Y., has published a “Point/Counterpoint” debate about the “association health plan” concept in its May newsletter.

AHP advocates want to let small businesses buy health coverage through national associations. The national association coverage would be exempt from state insurance regulation and state insurance mandates.

The newsletter editor notes that NCOIL has opposed AHPs, arguing that federal oversight might weaken consumer protection.

Mary Nell Lehnhard, a senior vice president with the Blue Cross and Blue Shield Association, Chicago, has written the article attacking AHP proposals.

“Exempting AHPs from state regulation will allow them to cherry-pick younger, healthier beneficiaries,” Lehnhard warns. “AHPs will be able to raise rates for sicker groups.”

AHPs could avoid state-enacted consumer protections, such as external review programs, and they could bring back some of the problems with fraud and mismanagement associated with multiple employer welfare arrangements, Lehnhard adds.

Hector Barreto, administrator of the U.S. Small Business Administration, defends the AHP concept.

“Well-meaning state-level regulation of group plans has?increased costs and decreased variety in plans,” Barreto writes. “A ?basic’ plan in most states is required to cover a number of specialty treatments.”

The mandates make small business coverage very expensive, Barreto says.

The federal Health Insurance Portability and Accountability Act of 1996 would prevent AHPs from cherry-picking, Barreto argues.


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