Labor Department Report Provides Support for Bush-Backed Bill To Create Association Health Plans
Department of Labor Secretary Elaine Chao on Friday "stepped up" the Bush administration's support of a "controversial" bill that would permit the creation of association health plans, under which small businesses could form purchasing pools to reduce the cost of health insurance for their employees, CongressDaily reports. A Labor Department report released Friday states that average health insurance premiums for small businesses increased 16.1% in 2001, compared with an average increase of 12% to 13% for all businesses. The report says the bill offers "safeguards" that require the plans to "hold reserves" and discourages "cherry-picking of the healthiest workers," also noting that plans would have to be certified by the department. Chao said, "Small business has long been the engine of our economic growth. They should not be forced to pay higher costs than large corporations for health insurance or to choose between wage increases and important health benefits for their workers." Rep. Calvin Dooley (D-Calif.) said, "With health insurance premiums continuing to rise, it's essential that we provide small business owners and employers with more affordable insurance options." But some critics of the legislation contend it would allow AHPs to avoid state regulations and "leave the sickest workers to pay the highest premiums." According to CongressDaily, it is "unclear" if the House will pass association health plan legislation any time this year, and the Senate is even "less likely" to pass such legislation (Fulton, CongressDaily, 9/13). The full report is available online. Note: You will need Adobe Acrobat Reader to view the report.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.