Lawmakers Expected To Reintroduce Legislation Allowing Formation of Association Health Plans
Federal lawmakers plan to reintroduce legislation (HR 1774) that would allow the formation of association health plans, under which national trade associations could offer small businesses health insurance, the Washington Times reports. The legislation comes as many small businesses are dropping or reducing employee health coverage because of rising premium rates, which increased 13% last year, the Times reports (Higgins, Washington Times, 2/5). The bill also follows media reports indicating that President Bush plans to advocate such legislation (California Healthline, 1/27). AHPs currently operate within state laws and follow individual consumer-protection laws and financial solvency requirements, but the bill would override such state regulations. Opponents say the bill would also waive state-mandated coverage requirements and allow a practice known as "cherry picking," under which insurers elect to cover mostly younger, healthier workers. Todd McCracken, president of the National Small Business United, an advocacy group, said, "Because older, sicker workers will be penalized, it ends up raising premiums even more for small businesses." But Dan Blankenburg, a National Federation of Independent Businesses lobbyist, said that the bill would mandate that AHPs cannot discriminate against older workers or workers with illnesses or disabilities. Bill co-sponsor Rep. Nydia Velazquez (D-N.Y.) added, "These plans are about giving small businesses a choice in their health care that they don't have today." Rep. Ernie Fletcher (R-Ky.), another bill co-sponsor, said that AHPs would increase health insurance competition and decrease small businesses' health plan premiums by 20% to 35% (Washington Times, 2/5).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.