Health Plan Legislation Approved
The Senate Health, Education, Labor and Pensions Committee on Wednesday voted 11-9 along party lines to approve a bill (S 1955) that would allow small businesses to form association health plans under certain conditions, CongressDaily reports (Povich, CongressDaily, 3/15).
The bill, sponsored by HELP committee Chair Mike Enzi (R-Wyo.), would allow small businesses and trade associations to join together to offer group health coverage on a statewide or nationwide basis. The bill would allow supervision of the plans to remain with state officials rather than the Department of Labor.
In addition, while the bill would permit business and trade associations to pool their members independently, they would not be allowed to establish self-insured plans, but rather would have to provide benefits through a fully funded plan (California Healthline, 3/9).
Under the bill, insurers would be permitted to sell plans to businesses and individuals that do not meet current state benefits requirements. However, they then also would have to offer a plan with benefits provided under a state employees' plan in one of the five most heavily-populated states -- California, Florida, Illinois, New York and Texas.
In addition, the bill would preempt state laws that limit how much insurers can vary premiums from one small business to another (Brownstein, Los Angeles Times, 3/16).
Committee Democrats proposed 17 amendments to the bill, each of which was defeated. A number of the amendments would have maintained certain state coverage mandates, and others would have regulated insurance pricing (Schuler, CQ Today, 3/15).
Sen. Mike DeWine (R-Ohio) was the only Republican to support any of the amendments, voting with Democrats seven times (Sheffield, The Hill, 3/16).
The bill now moves to the full Senate, where it likely will "face significant opposition," the Times reports (Los Angeles Times, 3/16).
Enzi said, "Let us put the power in the hands of small employers and family-owned businesses, rather than in the hands of insurance companies or the government. Let the consumers band together to drive the change that we want to see happen" (CongressDaily, 3/15).
Sen. Ben Nelson (D-Neb.), a co-author of the bill, said it would result in "a solid program," in part because the legislation would allow states to retain some oversight and because insurers still would have to be licensed by the states. He added that the bill represents a compromise that drew support from insurers, the Omaha World-Herald reports (Thompson, Omaha World-Herald, 3/16).
Bill co-sponsor Sen. Jim Talent (R-Mo.) said the legislation could reduce the cost of health insurance for small businesses by as much as 20% while providing health coverage to millions of uninsured U.S. residents (Poore, St. Louis Post-Dispatch, 3/15).
Sen. Edward Kennedy (D-Mass.) said the bill likely would result in "adverse selection," so that sick and elderly patients would lose access to insurance. He added that the legislation likely will open up discussions on a number of issues in the national health care debate, including prescription drug reimportation and mental health parity laws. Kennedy said, "This [bill] affects everything about health care" (CongressDaily, 3/15).
California Insurance Commissioner John Garamendi (D) said the bill would lead to "an ever-increasing number of people who are uninsured ... and for those with insurance, the benefit package is certain to be dramatically reduced" (Los Angeles Times, 3/16).
Families USA Executive Director Ron Pollack said the bill would eliminate state standards for new insurance policies written by small business alliances (St. Louis Post-Dispatch, 3/15).
APM's "Marketplace Morning Report" on Wednesday reported on the Senate AHP bill. The segment includes comments from Craig Orfield, spokesperson for the Senate HELP committee, and a U.S. resident whose AHP plan did not adequately cover the cancer medications her husband required, leaving her nearly $500,000 in debt after his death (Palmer, "Marketplace," APM, 3/15). The complete segment is available online in RealPlayer.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.