Consumer advocates are warning state insurance commissioners that they risk sacrificing state-based consumer protections if they support a Senate bill in its current form.
The advocates were responding to a letter from state insurance regulators to the bill’s sponsor regarding the proposed health care legislation.
The bill that is raising concern is S.B. 1955, The Health Insurance Marketplace Modernization and Affordability Act of 2005. It was introduced in November 2005 by Sen. Michael Enzi, R-Wyo., who is chairman of the Senate’s Health, Education, Labor and Pension Committee.
The bill seeks short- and long-term solutions to health care availability, including a provision that would allow businesses and trade associations to band their members together and offer group health insurance coverage on a national or statewide basis.
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During the consumer liaison session of the winter meeting of the National Association of Insurance Commissioners last month, funded consumer representatives raised concern over a letter sent to Enzi by the NAIC.
The letter, dated Nov. 7, 2005, thanks Enzi for “working with the NAIC to seek real solutions for employers who want to provide access to health care for their employees.”
It notes the NAIC’s opposition to association health plans, citing “…fragmentation of the market, cherry picking of risk, plan failures and increased fraud.” The letter also warns that the establishment of AHPs would lead to “higher premiums for most small businesses and a false sense of security for employees and their families, especially those with the greatest health care needs.”
But the letter also notes Enzi’s efforts to find an alternative to AHPs and cites “noteworthy improvements” in draft legislation that “do not allow associations to self-fund and those that preserve state oversight of the plans.”
The concept that state oversight would be preserved was one that was challenged by Mila Kofman, an NAIC funded consumer representative and an assistant research professor with Georgetown University.