Small-Business Insurance Groups Likely

By Tiana Velez, ARIZONA DAILY STAR

After seven flops, Senate on verge of acceptance

A bill allowing small businesses to join each other in multi- state associations to buy health insurance has succeeded where at least seven of its predecessors have failed.

Earlier this month, a U.S. Senate committee voted in favor of the 2005 bill titled “The Health Insurance Marketplace Modernization and Affordability Act,” making it the first association health plan bill to go before the full Senate for a vote.

Since the House has passed a similar bill, that’s the last hurdle before going to the president for his signature.

The bill, introduced by Sen. Mike Enzi, R-Wyoming, in November , would permit the formation of “small-business health plans.” These are “group health plans sponsored by trade, industry, professional, chamber of commerce or similar business associations,” according to a congressional summary.

What has separated this from prior legislative attempts to establish association health plans is the involvement of various interest groups representing the insurance companies, state insurance regulators and the business community, said Amanda Austin, manager of legislative affairs at the National Federation of Independent Business in Washington, D.C.

“The key here is choice,” she said. Statistically 51 percent “of the 46 million uninsured work for small businesses. Something is not working. Let’s inject more competition into this market.”

The concept of small businesses joining together to buy health insurance would not be entirely new to Southern Arizona, said Hank Peck, senior vice president of Compass Insurance in Tucson.

“We’re fortunate in Tucson to have Pima Community Access Program and the Healthcare Group (offered by University Physicians). So we have some options here,” he said.

Enabling the associations to pool members across state lines would give them greater purchasing power, say proponents of the plans such as U.S. Rep. Jim Kolbe, R-Ariz., who co-sponsored the House version of the bill, the Small Business Health Fairness Act of 2005.

“They increase the buying and bargaining power that an individual small business would not have by itself,” Kolbe said in a statement following the House passage of the act last fall.

One of the law’s supporters is Small Business Health Plans Now, an association of more than 170 national groups representing more than 12 million employers.

In its defense of the proposed association health plans, the associations says they “could save small businesses an estimated 15 to 30 percent compared with the cost of purchasing coverage directly from an insurance company.”

Opponents of the association health plans argue the current legislation will let insurers in the new plans ignore certain state mandates so long as they offer at least one comprehensive benefit equal to those provided to state employees by the five most populous states.

In a letter to Enzi, representatives from the Santa Monica-based Foundation for Taxpayer and Consumer Rights says the “legislation removes all requirements that the federal rules incorporate, let alone improve on, the state law they replace.”

Similar arguments prompted a nay vote from Rep. Ral Grijalva on the House bill that eventually passed, said Natalie Luna, spokeswoman for the Arizona Democrat.

Neither of Arizona’s U.S. senators, Jon Kyl and John McCain, has declared his intentions with regard to the Senate bill, although McCain was a co-sponsor of an earlier, similar piece of legislation.

Said Peck, the insurance broker: “As it stands, it (the bill) appears to be a good collaborative effort on the part of a lot of different parties.”

Whether the bill will have much impact in Arizona remains to be seen, however.

“At first everybody might say, ‘I’m signing on to that association plan.’ But if they felt their plan was better, they’d leave. In time the market would level itself out,” Peck said.

Highlights

* Highlights of S. 1955, The Health Insurance Marketplace Modernization and Affordability Act of 2005.

* Eligible trade and professional associations can pool members across state lines to buy health coverage as a large group rather than individual small businesses.

* Association health plans must be fully insured, not self- funded.

* States, not the federal government, retain primary oversight of insurance coverage.

* At least one comprehensive benefit option, such as prescription drug coverage, must be offered by the association plan. Benefit options are modeled after those offered by the five largest state employee health benefit plans.

* A commission would be created under the U.S. Department of Health and Human Services to develop uniform standards for use by the various state health insurance regulators.

History

* Timeline of Association Health Plan legislation

1995-1996: A bill introduced in the House of Representatives as a portion of the Health Insurance Portability and Accountability Act, or HIPAA, is dropped due to opposition from the Clinton administration.

1997-1998: Two similar AHP bills are introduced separately in the House and Senate but are dropped during the House-Senate conference. In 1998 another form of the bill is included in the Republican version of the Patients’ Bill of Rights, which the Senate does not pass that year.

1999-2000: The House approves the Patients’ Bill of Rights, which includes a version of the Association Health Plan bill. The Senate passes an equivalent bill, minus the AHP portion.

2001-2002: The Small Business Health Fairness Act of 2001 is introduced in both the House and the Senate. The House approves the bill; the Senate does not.

2003-2004: The Small Business Health Fairness Act of 2003 passes the House. The bill authorizes the formation of multistate, federally-certified association health plans. It also grants them exemptions from certain state regulations.

The Senate version, co-sponsored by Sen. John McCain, is stalled and never comes up for a vote.

2005-2006: In July, by a vote of 263-165 in favor, a bill similar to the 2003 one is passed by the House and referred to the Senate. That November, Sen. Mike Enzi introduces the Senate version of the House bill. It is approved by the Senate committee earlier this month.

May 2006: The full Senate is expected to vote on the bill. If passed, the legislation would go to President Bush.

Source: www.sbhpsnow.com

* Contact reporter Tiana Velez at 434-4083 or tvelez@azstarnet.com.

(c) 2006 Arizona Daily Star. Provided by ProQuest Information and Learning. All rights Reserved.