Bush’s Proposed Health Insurance Pools Could Threaten State-Mandated Benefits for Small Business Employees
President Bush's proposal to allow small businesses to pool together to purchase health coverage for their employees could threaten a number of health benefits for small business employees mandated by California law, the Sacramento Bee reports. According to Bush, the proposal would spread the risk and cost of health insurance among employers in different states and, as a result, reduce health care costs for thousands of small businesses (see related story). Health policy analysts said that the proposal may reduce health insurance costs for small businesses in California but warned that the health insurance pools established under Bush's proposal would be federally regulated and exempt from many "stringent patient protection measures" passed in California. State law, for example, provides patients with the right to a second opinion in disputes with health plans; offers people with AIDS the right to receive treatment from an AIDS specialist; mandates mental health coverage; and requires "continuity of care" for pregnant women and people with AIDS and cancer. Federal law does not offer those and other patient protections required under California law.
Health policy analysts also said that Bush's plan could "jeopardize" two state-sponsored health insurance pools for small businesses -- Pac Advantage and California Choice. The health insurance pools established under Bush's proposal would have fewer mandated benefits and could offer lower-priced products attractive to companies in sectors with traditionally healthier workers. That would leave small businesses with "sicker workers" to buy health care from the two state health insurance pools, which are legally required to provide more benefits. "What Bush is proposing would destroy the marketplace," Karen Pollitz, a health policy researcher at Georgetown University, said, adding, "California has, like many states, tried to take cherry-picking out of health care, and this will disrupt that effort." California Choice provides health insurance for 160,000 employees in 11,000 state small businesses, and Pac Advantage, established by the Legislature in 1992, covers 147,000 employees in 11,000 small businesses (Rapaport, Sacramento Bee, 3/20).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.