WASHINGTON, March 20 (UPI) -- A bill that would allow business and trade associations to pool together to purchase health insurance plans for employees passed committee last week, ending a more than decade-long Senate stalemate.
The Senate Health, Education, Labor and Pensions Committee last week voted 11-9 in favor of The Health Insurance Marketplace Modernization and Affordability Act, sponsored by committee chairman Mike Enzi, R-Wyo., and Sens. Ben Nelson, D-Neb., and Conrad Burns, R-Mont.
The proposed law will next move to the Senate for a vote.
The bill allows groups to form insurance pools and purchase association health plans (AHPs) that are exempt from most state regulations. A bill allowing AHPs has passed the House numerous times, but never saw any movement in the Senate.
"Today's vote is the first major step in 15 years toward more affordable health insurance options for small business and working families," Enzi said. "The people who make up the bedrock of our economy - small, family owned businesses, have demanded change."
The current bill is considered a compromise between supporters and opponents of AHPs because it requires plans to offer two plans - one with minimal benefits and another in line with the benefits offered to state employees by one of the five most populous states.
It is also further-ranging than previous bills and the version passed in the House, because it applies not only to individuals in AHPs, but could be used to free portions of the large-group insurance market from state regulations as well.
Those in favor of the legislation, including the Bush Administration, say it will free businesses from a patchwork of different state regulations and reduce the cost of insurance for everyone by forcing traditional insurers to compete. But those who oppose it say it will undermine critical consumer protections and reduce benefits for all Americans.
The measure will help businesses cope with the regulatory burden imposed by conflicting state regulations, Katie Strong, director of congressional and public affairs at the U.S. Chamber of Commerce, told United Press International.
"State by state regulation varies so greatly that if you have employees in multiple states it becomes very difficult," she said. "We think this a very positive step forward."
It will also help companies' bottom lines because small businesses will be able to pool risk and large businesses will benefit from competition, she said. "Now there are many states where there is not competition. We think this bill would allow some insurers to get back into places where they were driven out before."
The bill should make it further than during previous attempts to move it through the Senate because of its supporters," she said. "Having Ben Nelson - himself a former insurance commissioner - as a co-sponsor will lead others who have had concerns in the past to take another look."
The National Small Business Association, which opposed previous AHP legislation, arguing it would have given federal AHPs an advantage over state-regulating insuring entities, has also come out in favor of the Enzi bill. A report commissions by the group says it would reduce the number of uninsured in America by 900,000 and reduce health insurance premiums for all small employers by 12 percent.
The pre-emption of important state regulations, however, could prevent consumers from receiving critical care such as alcoholism treatment, cancer screening and emergency services, said Ron Pollack, executive director of the Families USA health insurance consumer group.
"This is as destructive an anti-consumer piece of legislation as any bill in recent memory," Pollack told UPI. "The sicker people will be left in traditional insurance - in sicker pools. Those people who need healthcare the most are going to end up with much higher out-of-pocket costs and premiums."
The law will also not reduce the ranks of the uninsured, he said, pointing to a 2005 Congressional Budget Office report.
In addition to eliminating state benefit requirements, he said, the bill would also end important consumer protections that prevent insurers from delaying payment on claims and raising premiums for sick beneficiaries.
The problems with the bill and the large number of people it affects will galvanize opposition, Pollack said. "I don't think it will be very easy to pass this bill in the Senate."
