Senate
Stalls Small Business Health Fairness Act (H.R.660/S.545) October 9, 2003 THE ISSUE
AT HAND U.S. Senators are
under considerable pressure from the President, House GOP,
and small business constituents to pass the Small Business
Health Fairness Act, S.545, but the measure has picked up
little support. The House version (H.R.660) passed easily
in June 2003, largely along a party-line vote. NASW and our
coalition partners have consistently opposed the bill. S.545
aims to provide small businesses, including associations,
with lower cost and bare bones health insurance for their
employee groups thlrough association health plans (AHPs).
NASW is highly supportive of increasing access to health
care coverage for working people, but we oppose S.545, because
it would exempt AHPs from state laws and regulations (including
mental health benefit mandates), eviscerate state consumer
protections, and increase health insurance costs for employee
groups left out of the new plans. Current Status In response to recent Census Bureau
reports of increasing numbers of uninsured in the country,
the President and House GOP have increased pressure on the
Senate to pass S.545. To support their efforts, the small
business lobby has launched a grass roots campaign in targeted states. Proponents seek Senate
passage of S.545 by the end of the year and have targeted
specific states, including Alaska, Arkansas, Iowa, Kansas,
New Hampshire, Ohio, South Carolina, Tennessee, Virginia,
and Wyoming. In spite of all the pressure, NASW and its coalition
partners have detected no increase in Senate support for
the legislation; only eight Senators have publicly supported
the bill. With relatively little Senate support, NASW believes
this bill is unlikely to be considered on the floor this
year. BACKGROUND AHPs offer small
businesses the opportunity to join together through trade
and professional associations to collectively purchase health
benefits at lower rates than they are typically offered individually.
Current law requires AHPs to be regulated under both federal
and state law. The Small Business Fairness Act would exempt
AHPs from state laws, consumer protections, mandated benefit
laws, and other safeguards, thus significantly increasing
the risk for fraud and abuse. Recently,
failures of association-type health plans have left more
than 100,000 participants nationwide with over $30 million
in unpaid medical bills. The
National Association of Attorneys General warns that
a mid-1970s experiment with a similar type of plan left
at least 398,000 consumers stuck with a total of more
than $123 million in unpaid claims. "Elimination
of the state role and replacement with weak federal oversight
is a bad deal for small businesses and for consumers," they
warn. The
National Governors' Association, the National Conference
of State Legislatures,
many large health insurers, the National Association of Insurance
Commissioners, and NASW have strongly opposed AHPs before
Congress. Our reasoning is that, although AHPs could reduce
insurance costs for some companies with young, healthy workers,
many small businesses with older and higher risk employees
would be left behind in the regular insurance market, facing
significantly higher rates. The Congressional Budget Office
estimates that AHPs would result in higher premiums for 80
percent of small businesses and their workers, ultimately
resulting in more uninsured Americans. |
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