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Last updated on April 16, 2014 at 12:38 EDT

House oks small business health plan

July 26, 2005

WASHINGTON (Reuters) – The U.S. House on Tuesday approved
legislation that would allow small businesses to pool together
to purchase health insurance for their workers.

Backers said the measure would restrain health costs and
help cover some of the millions of uninsured working people,
but critics said this approach could provide bare-bones
insurance to some workers and leave others facing even higher
bills.

“The most coveted health insurance available in America is
offered by big companies and unions. All we’re trying to do in
the bill is to give small employers the same opportunities to
provide high-quality health insurance to their employees at
competitive rates,” said Ohio Republican Rep. John Boehner,
chairman of the Education and Workforce Committee, in debate.

The bill, approved on a 263-165 vote, has passed the House
several times in recent years but has always faced opposition
in the Senate, even from some influential Republicans. The idea
has gained some support in the Senate in the last year or so
but probably not enough to win approval in its current form.

The legislation would allow small businesses, trade
associations or business organizations to pool their purchasing
power together and try to get better prices on health plans.

But it also exempts these Association Health Plans, or
AHPs, from many state regulations, prompting opposition from
patient advocacy groups and insurers.

Democrats said that could lead to “bare bone” coverage,
possibly excluding even such tests as mammograms to screen for
breast cancer.

President Bush hailed passage of the act in the House and
urged the Senate to follow suit this year.

“By letting small businesses join together to buy insurance
at the same discounts big companies get, this bill will help
workers and their families have more health care choices and
obtain greater savings,” the Republican president said in a
statement.

Democrats argued, however, that the AHP plans would be able
to choose relatively young and healthy workers, and exclude
older sicker ones, who would then face even higher insurance
premiums outside the AHP framework.