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House Passes Association Health Plan Bill

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NU Online News Service, May 14, 2004, 6:02 p.m. EDT – The U.S. House has voted 252-162 for a bill that could create a national association health plan system.[@@]

The bill, H.R. 4281, would give small employers a legal right to join self-funded health plans run by national or multistate associations.

The House decided after it approved the AHP bill, which was sponsored by Rep. Sam Johnson, R-Texas, to append it to another health insurance bill, H.R. 4279.

H.R. 4279 is a popular bill that would let employees contribute up to $500 in cash stranded in cafeteria plans and flexible spending accounts to health savings accounts.

Advocates of the association health plan concept, including President Bush and Sen. Olympia Snowe, R-Maine, say the association plans would give small employers the same freedom from costly state benefit mandates that large self-insured employers now enjoy.

Opponents say a national AHP system could undermine the entire small group health insurance system by letting poorly supervised, poorly capitalized self-funded plans use low bids to take small groups with good claims experience away from state-regulated insurers.

“We agree that overlapping and duplicative state regulations raise health care costs and swell the ranks of the uninsured,” says Karen Ignagni, president of America’s Health Insurance Plans, Washington.”However, we don’t support carving out special preferences for an untested approach to health care coverage while health insurance plans that have a proven track record must comply with a bewildering and conflicting maze of regulations that pushes up the cost of coverage for millions of Americans.”

Congress would be better off finding ways to cut red tape for all health plans, Ignagni says.

Links to the text of the bill and other information about the bill are on the Web at