Association health plans backed
By Joyce M. Rosenberg
Associated Press
NEW YORK — When President Bush gives his State of the Union address on Tuesday, his agenda is expected to include help for small businesses hurt by rising healthcare costs.
Bush wants to create national association health plans. Known as AHPs, they would allow small businesses to buy into group health insurance plans anywhere in the country, enabling them to pay much less than they pay now when buying small policies directly from insurers.
Association health plans already exist — trade associations and chambers of commerce are among the organizations that sponsor them — but these plans are tailored to individual states. A major obstacle to a national AHP is the difference in requirements that states have for what health plans must cover.
For example, some states require routine mammograms to be covered, or for insurers to reimburse policyholders for birth-control pills, while other states do not. Bush is expected to ask Congress to pass a federal law that would supersede these and other state rules.
Small-business advocacy groups generally support the idea.
"We see AHPs as a common- sense way to lower healthcare costs by encouraging competition and a free-market approach rather than a government or taxpayer funded solution," said Ed Frank, spokesman for the Washington-based National Federation of Independent Business.
Jamie Amaral, the federation's national director of healthcare, said small businesses could see their health insurance costs fall by double digits under AHPs because of lower administrative expenses.
At National Small Business United, also a Washington-based advocacy group, president Todd McCracken wants to see companies' health costs decline, but he's also concerned that AHPs might end up hurting some firms and their employees by excluding coverage for medical conditions that are expensive to treat.
"You have some some very legitimate associations that want to provide better benefits to their members, but some unscrupulous ones want to design a health plan that isn't particularly good for people who are older and sicker," McCracken said.
That could be particularly problematic if other AHPs, feeling the need to compete, also exclude such patients, he said, explaining that "it doesn't take very many players who play these games to force everyone else to do the same."
Under that scenario, employers who want to be sure all their workers are cared for could ultimately end up paying more for insurance someplace else.
The Blue Cross Blue Shield Association, which represents independent, locally operated Blue Cross and Blue Shield insurance plans, raised similar concerns.
But the National Federation of Independent Business, which is already lobbying for the creation of national AHPs, doesn't expect the law to leave such workers uncovered.
Frank said large labor unions and Fortune 500 and other big companies already have national insurance plans encompassing workers in many if not all of the states.
He noted that these plans are set up to comply with rules under ERISA, the Employee Retirement Income Security Act of 1974, and said his federation was campaigning for AHPs to also operate under those regulations.
