Inside: Stateline.org - U.S. Insurance Bill Upsets States


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When it comes to health insurance in America there seems to be an uncurable political obsession with the total absense of logic. Also, what's good for the goose doesn't seem apply to the gander, either.

The so-called 'Enzi Bill' which is being hotly contested in the Senate and by consumer groups across America, endeavors to allow small businesses to drink from the same priviledged health insurance waters that large companies have enjoyed through self-insured programs since the Employee Retirement Income Security Act (ERISA) became federal law in 1974.

Since 1974 large companies through ERISA have been able to self-insure without having to comply with tedious state imposed regulations. This glorious amnesty has enabled large companies to sidestep state regulations in order to offer comprehensive health insurance packages to their employees at substantially more economical rates; in effect, bargain-hunt across state lines.

Since then, though, there have been some 'ringers', some of the more exemplary health insurance products around have been minted through these offerings. What the 'Enzi Bill' proposes to do is to empower trade and professional "associations" with the same priviledges, under ERISA jurisdiction, in order to to craft the most cost-effective health insurance plans possible for their members and, even more importantly, enable them to engage plans without the cost-prohibitive administrative nightmare of having to deal with the gnarling complexities of 50 unique sets of state mandated regulations.

As with large company self-insure deployments, the Department of Labor, a staunch supporter of AHP legistlation, would be the master keyholder to any such healthcare initiatives. Here's what the (DOL) has to say about AHP's:

"In a voluntary health benefits system, how can small employers be encouraged to offer coverage? The challenge is to create incentives and remove barriers. Preemption of 50 state insurance regulatory regimes under federal ERISA law has allowed large employers and unions to provide cost-effective health benefits. A federal structure for small employers would bring stability, uniformity and lower costs for health care coverage."

"AHPs will provide small businesses the opportunity to band together through trade and professional associations to purchase affordable health benefits. By joining together, small employers will enjoy greater bargaining power, economies of scale, and administrative efficiencies. In this way, AHPs will level the playing field and give participating small employers the same advantages as larger employers and employers who provide benefits through Taft-Hartley plans (plans sponsored jointly by a union and two or more employers)."

"The lack of health insurance in America disproportionately affects workers in small businesses. About half of all uninsured Americans are in families headed by workers who are self-employed or who work at firms with fewer than 100 employees. Workers at the smallest firms are far less likely to be covered on the job, and far more likely to be without insurance from any source."

"Among private-sector firms with fewer than 100 employees, health benefits wer offered at just 49% of work sites in 2000, compared with 98% among larger firms."

"Considering only low-wage work sites, where at least half of the employees earned less than $9.50 per hour, the disparity between small and large firms is even greater. Benefits were offered at just 34% of small firm low-wage work sites, compared with 95% of large firms."

"Among 600 small businesses responding to a recent survey, less than one-third currently offer insurance, but about three-fourths said they would be 'very' or 'somewhat likely' to participate in an AHP that offered lower prices, more choices, or less paperwork."

As far as regulatory devices that would govern AHP entities, rigid ERISA compliance doctrine, alot of which is already in place, would enforce consumer protection safeguards through DOL.

According to the DOL, all AHP entry requirements would be determined by qualified actuary and in the event an AHP became unable to satisfy its financial obligations, "DOL could assume trusteeship over the AHP and pay premiums to a stop-loss and/or indemnification insurer to ensure that consumers’ outstanding claims for health benefits are paid."

According to the DOL release, attempts at "cherry-picking" that would sculpt plans that benefit only healthy people or "make it easier for insurers to target their coverage to businesses with healthier workers (Sen. Ted Kennedy, D-Mass.)", would be fruitless in that, among an arsenal of pre-emptive barriers:

Only bona fide associations that are in existence for three years for purposes other than providing health insurance would be eligible to sponsor an AHP.

The legislation makes clear that AHPs will have to comply with the Health Insurance Portability and Accountability Act (HIPAA), prohibiting group health plans from excluding high-risk individuals or employers with high claims experience.

It's time cut the bull and all the political inuendo that continues to sicken America. Considereing the self- insured sector appears to have been the least affected by the healthcare crisis that is crippling the American family and workplace, it would seem that common sense insists that a closer look be taken at the model.

If the possiblity does exist that AHP legistlation would destroy state-fought health insurance standards, how is it that few of its critics can be more specific than soundbites and generalizations that attempt to engender paranoia in the masses?

How is it that in such media dissertations on jeapordy and demise, there hasn't been a telling roll call of large self-insured ERISA/DOL sanctioned villains that would demonstrate the point?

That kind of blank political inuendo is called wanting to have your bread buttered on both sides.

You can obtain a free copy of the DOL/AHP Report, ASSOCIATION HEALTH PLANS - IMPROVING ACCESS TO AFFORDABLE QUALITY HEALTH CARE FOR SMALL BUSINESSES , here.







Stateline.org: Top Story

U.S. insurance Bill Upsets States
By Daniel C. Vock, Stateline.org Staff Writer

Thursday, April 27, 2006

A proposal before the U.S. Senate designed to help small businesses buy cheaper health insurance has many state officials up in arms because it could strip states of their power to regulate carriers and dictate what insurers must cover.

At least 39 state attorneys general, three governors and 16 state insurance regulators object to the legislation.

“This bill contains provisions that will erode state oversight of health insurance plans and eliminate consumer protections in the areas of mandated benefits and internal grievance procedures,” 39 members of the National Association of Attorneys General said in a letter to U.S. senators.

The controversial measure would let trade associations buy coverage from insurance companies and offer it to members and their employees nationwide, even if the plans didn’t comply with individual state laws.

The legislation would let existing small business plans avoid state regulations too, in order to make sure new plans don’t have an unfair advantage.

Business leaders argue that insurance companies are loathe to offer nationwide products today, because products they offer must comply with at least 50 different sets of laws.

They point to the experience of the Associated Builders and Contractors, which shut down its 43-year-old health insurance plan after its insurance company quit and more than 50 others declined to take its place.

Carriers said they were unwilling to assume the business because state laws they would have to obey dictated how they could set rates, who must be eligible and what services they must provide.

“We were legislated out of business, effectively, by the states,” Joseph E. Rossman, ABC’s vice-president of fringe benefits, said

The so-called Enzi Bill, named after U.S. Sen. Mike Enzi, a Wyoming Republican, grows out of an effort to help small-business groups such as ABC offer members the
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