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Life Health > Health Insurance > Life Insurance Strategies

AHP Bill's Fate Is Uncertain

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The fate of legislation that would create association health plans remains unclear.

With the legislation scheduled to reach the Senate floor the week of May 1, both supporters and detractors met with the media to try to generate public support for their position–and pressure members of the Senate to take their side.

S. 1955, the Health Insurance Marketplace Modernization and Affordability Act, passed the Senate Health, Education, Labor and Pensions Committee March 15 by an 11-9 vote.

The bill, sponsored by Sens. Michael Enzi, R-Wyo., and Ben Nelson, D-Neb., has strong support from the Bush administration and conservatives in Congress. A stronger bill calling for more federal pre-emption of state health care mandates passed the House last year on a party-line vote.

Supporters of the Senate bill argue that, although an insurer providing AHP coverage would have to be licensed in every state in which it sold the plans, it could offer an association a uniform benefits package that would not reflect variations in state benefits mandates.

But the bill, which would make it easier for associations or small businesses to band together to buy health insurance, has faced strong opposition from insurers, state insurance regulators and many Democrats.

In a note to investors April 26, Beth Mantz Steindecker and Ira S. Loss of Washington Analysis said, “we doubt that the Senate will pass” the legislation.

“In previous years, despite passage in the House, these bills have failed to garner enough votes in the Senate due to opposition by Senate Democrats and moderate Republicans,” the analysts added. “This year is no different, even though the Senate’s proposed bills have been modified to attract greater support.”

The bill’s industry critics include provider and insurance groups such as the Blue Cross and Blue Shield Association, Chicago, the National Association of Insurance and Financial Advisors, Falls Church, Va., and America’s Health Insurance Plans, Washington.

State insurance regulators are divided on the bill, but the National Conference of Insurance Legislators issued a statement in March highly critical of the idea.

Sen. Ron Wyden, D-Ore., predicted at a recent National Association of Health Underwriters conference that the bill’s passage is unlikely. NAHU members support the bill.

That concern was acknowledged by Enzi April 26 as he joined Nelson and representatives of the National Federation of Independent Business in pressuring recalcitrant senators to support the bill.

The NFIP has lined up petitions signed by members in all 50 states supporting S. 1955. NFIB officials say they plan to present each member of the Senate with the petitions from their states.

A total of 450,000 small business members signed the petitions, according to Todd Stottlemeyer, NFIB president and CEO.

“Access to affordable health care is the No. 1 concern of small business owners, so making small business health plans a reality is NFIB’s top priority,” Stottlemeyer said.

Enzi said, “Our health care system is pushing too many into the ranks of uninsured,” estimating that 17 million small business employees don’t have health care.

In an interview, Nelson, a former governor and insurance regulator in Nebraska, said that “states are opposed to pre-emption–and in most cases I support them. But this issue has gotten away from us.”

He also said it is “really hard” to say if the bill would pass the Senate and that he is still working to craft a compromise that would make it acceptable to critics.

Enzi also admitted one major concern of Democrats on the edge is that if they support the moderate Senate bill, language from the stronger–and unacceptable–House bill would prevail in a conference. “That is the way I read it,” he said, conceding that there are a “lot of differences between the House and Senate bills.”

The AARP, the American Cancer Society and the American Diabetes Association scheduled a press conference April 27 to announce they have joined to defeat the bill.

The Senate bill “could make health care coverage more expensive for sicker or older workers and could eliminate important health screenings for cancer, diabetes and other life-threatening or chronic illnesses,” the groups said.

The groups also said they were preparing joint national advertising that will help educate voters about the “negative effects” of the bill.

The legislation would also pre-empt many state-mandated health benefits such as mammography, cancer screenings, emergency care, mental health services, and diabetic supplies and education, they said.

Because the bill would allow small businesses to work through their national trade associations across state lines, businesses could purchase health insurance for their workers free of important state regulation, the groups argued.

“By doing so, Congress would partly undercut the states’ traditional role of regulating the business of insurance, such as setting requirements for what benefits should be covered and how insurance should be priced,” the groups said.

AARP CEO Bill Novelli said making health care more accessible to small business was “laudable” but argued the proposed legislation would “give these businesses an incentive to avoid hiring or retaining sicker or older workers.”


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