Opinion Divided on Plans To Improve Insurance Access

Measures to allow small businesses to obtain less-expensive insurance through a united approach to insurers are the focus of an intense lobbying campaign as businesses push the measures in the face of opposition from organizations representing those with disabilities and chronic illnesses.

Called different names under different proposals, “association health plans” or “small business health plans” would allow smaller employers to band together to obtain insurance discounts now available only to large companies.

The proposals are seen as a key step in reining in ever-accelerating health care costs for workers and employers by mostly Republican legislators and the Bush administration.

In comments to insurance company executives and others in the health care industry at the April meeting of the World Health Care Congress, President Bush and senior administration officials repeatedly described the plans as key elements in their effort to rein in rising insurance costs. Bush said the association health plans will provide small companies with the same insurance savings as large companies, which should help hold down costs overall.

The full Senate is expected to take up the leading bill to create such programs in mid-May. The bill (S 1955), sponsored by the powerful chair of the Senate Health, Education, Labor, and Pensions (HELP) Committee, Sen. Mike Enzi (R-Wyo.), would allow small businesses to organize to offer health insurance to their workers and bypasses most state coverage mandates.

The legislation is strongly supported by the National Federation of Independent Businesses, which presented members of Congress with 450,000 signed petitions in support of legislation in April.

The bill's opposition, which includes 39 state attorneys general and several organizations focused on chronic diseases, said it will undermine the insurance market and drive up costs for the sickest beneficiaries. In a letter to the Senate, the attorneys general said the bill would strip states of many of their rights to regulate health insurers, including limits on what insurers charge for small-group plans sold to businesses with two to 50 workers.

The bill also would remove states' authority to require insurers to provide specific services, such as screening tests for cancer, diabetes supplies, or substance abuse treatment.

The National Mental Health Association warned that the bill could lead many insurers to limit or even drop mental health coverage. Such limitations could leave untreated those with psychiatric disorders and result in decreased job productivity, increased absenteeism, unemployment, costly emergency room care, hospitalization, homelessness, and even suicide.

APA agrees with the bill's underlying goal of decreasing the number of uninsured but opposes the the bill's intent to override state mandates.

APA unsuccessfully sought to amend the bill while it was before the HELP committee to require full parity for mental health care in health plans covered by the legislation (Psychiatric News, April 7).

“This legislation is a step backward in the effort to get federal mental health parity,” said Nicholas Meyers, director of APA's Department of Government Relations.

The criticisms of the legislation generally fall under concerns that it will either weaken many state guidelines that govern health care insurance providers or eliminate the ability of states to take enforcement actions.

The bill would also remove limits on how much of a surcharge insurers can impose on small groups when one of their members is seriously ill. It would preempt state accountability rules for all types of health insurance in areas such as prompt claims payment, appeals rights, audit authority, and insurers' filing requirements.

Another criticism of the measure is that it would allow insurers to choose to follow state laws or the new, less strict federal rules. It would limit state enforcement of federal rules to federal court and give insurers the right to sue a state if they disagree with the way it is enforcing the rules.

“Regulation adds to the cost of health insurance, but it is needed to make sure the insurers do what they say they will,” said Karen Pollitz, an opponent of the bill and policy director for the Georgetown University Health Policy Institute.

The changes would allow insurers to more easily circumvent the law and find out how sick the people applying for their policies are, she said. “The unintended consequences of this legislation will be splitting the risk pool, and a lot of sick people are not going to get coverage,” Pollitz said.

The bill's supporters, including Joseph Rossmann, vice president of Associated Builders and Contractors Inc., said that within the new system, it is in the associations' interests to make sure their members are offered comprehensive plan options that include chronic illness coverage.

The bill's opponents said opposition by most Senate Democrats and weak support from moderate Republicans may limit the bill's future, but the need for lawmakers to boast of a health care accomplishment in an election year may spur its advance.

Sen. Olympia Snowe (R-Maine) is the author of an alternative bill (S 406) that is opposed by the insurance industry and has been stalled in the Senate for years. Snowe has yet to sign on to Enzi's bill, which lacks a key provision in her bill that would allow small-business health plans to self-insure and thus be exempt from state regulation. The Enzi bill would allow small-business health plans to bypass state coverage mandates only if they also sell at least one policy that matches a benefit plan offered to state employees in one of the five most populous states.

Opponents of the Enzi bill describe this provision as a weak protection for the public, since there are several options within those state plans that are offer only minimal coverage.

“We foresee the number of uninsured and underinsured going up if this becomes law,” Pollitz said.

The House passed legislation (HR 525) last July that mirrors Snowe's bill. If the Enzi bill is approved, members of the two houses would have to resolve differences and come up with final language.

Although most Democratic senators oppose both bills and are expected to offer amendments to draw away Republican support when it is considered by the full Senate, Pollitz said grass-roots pressure is pushing many to support the bill. Other issues that may arise as amendments, according to congressional staffers, are those that address a cap on medical malpractice awards, expanding health savings accounts, and extending the May 15 Medicare Part D enrollment deadline.

Information on both sides of the issue is posted at<www.protectyourhealthcare.org/> and<http://capwiz.com/nfib/issues/alert/?alertid=8167701>; S 1955 is posted at<http://thomas.loc.gov/cgi-bin/bdquery/z?d109:s.01955:/>; HR 525 is posted at<http://thomas.loc.gov/cgi-bin/query/z?c109:H.R.525:/>.▪