Consumer Group Petitions Garamendi for New Rules for AHPs
The Santa Monica-based Foundation for Taxpayer and Consumer Rights has filed a petition with Insurance Commissioner John Garamendi (D) to make rules governing association health plans more stringent, a spokesperson for Garamendi's office said Tuesday, the Los Angeles Times reports. Estimates show that about 10 million people nationwide are covered by AHPs.
According to the Times, some AHPs indicate that they provide 100% coverage but include provisions that can cap some medical benefits, such as $200 per day for a hospital visit. Some hospitals charge $3,000 or more daily.
Current state insurance regulations, dating back to the 1970s, require basic hospital benefits to be of "real economic value" and set a maximum hospital stay benefit of $30 per day.
The Department of Insurance plans to hold a hearing in San Francisco on Sept. 20 to discuss the issue.
Federal lawmakers are considering legislation (HR 525) that would allow AHPs to organize across state lines and be exempt from state laws and lawsuits filed in state courts.
Some small-business groups and the Bush administration support the legislation. Garamendi and other state insurance regulators have voiced opposition to the legislation, which the House approved in July (Vrana, Los Angeles Times, 8/17).