Re: Association Health Plans
National has asked us to support the creation of Association Health
Plans by urging passage of the Small Business Health Fairness Act
(S. 545) in the United States Senate.
Background
Association Health Plans would allow small businesses to band together
across state boundaries to purchase health insurance. National NAWBO
has championed this issue for several years.
Those in favor of this bill say it will:
1. Introduce competition in the small group health insurance market
2. Reduce unnecessary regulation and administrative costs
3. Make health coverage more affordable by giving small groups
collective purchasing power to negotiate lower rates
4. Level the playing field by allowing small businesses to sidestep
state mandates in the same way that large employers can
5. Expand health coverage to small businesses that don't offer
it
See www.ahpsnow.com
Critics of Association Health Plans Say:
1. In states where small group purchasing arrangements exist, the
savings in premium through economies of scale were marginal at
best. The Congressional Budget Office estimated no savings from
this route.
2. A purchasing organization of smaller groups has administrative
costs that a large employer's human resources department may absorb.
3. Association health plans are not the same as a single large group.
If the association's claims experience causes premiums to go up,
small businesses have the option of leaving the plan and shopping
for better rates.
4. Health care coverage among small businesses did not increase in
California, Connecticut, and Florida where statewide small-group
health insurance purchasing alliances was available.
See "Have small-group health insurance purchasing alliances
increased coverage?" by Stephen H. Long and M. Susan Marquis,
and "HealthMarts, HIPCs, MEWAs, and AHPs: A Guide for the Perplexed," by
Mark A. Hall, et al. Health Affairs, Volume 20, Number I, January
February 2001. For an assessment of the effects of AHP legislation
on the California's small group market, see a recent study released
by the California Healthcare Foundation (www.chcf.org).
We encourage you to come to your own conclusions and take action.
Contact Senator Barbara Mikulski at 202 224-4654 senator@mikulski.senate.gov
Senator Paul Sarbanes at 202 224-4524 senator@sarbanes.senate.gov
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