|
|
WASHINGTON, D.C. – Senator Olympia Snowe (R-ME) made a New Year’s resolution for 2006: to finally press Congress to pass the long-awaited Small Business Health Fairness Act. The legislation, most recently introduced by Snowe in 2005, would provide small businesses with affordable health insurance plans by creating Association Health Plans. Snowe is chair of the Senate Committee on Small Business & Entrepreneurship.
| ALL ABOUT AHPs |
HOW AHPs WOULD WORK. As it stands, small businesses have few affordable health insurance options, with five or fewer insurers controlling at least three quarters of the small group market in most states, according to the General Accounting Office. This lack of competition has led to steep rate increases and a rise in the number of uninsured companies. Association Health Plans (AHPs), however, would introduce more competition into the insurance market, thereby lowering rates. Through AHPs, associations in an array of industries could work with insurers to create industry-specific health plans with just the right benefits for their members. For a given association, this set of benefits would be sold nationwide to any association members who choose to join. Moreover, businesses that belong to more than one association buying into AHPs would have that many more options available. The Congressional Budget Office estimated that small businesses obtaining insurance through AHPs could experience premium reductions of 13 to 25 percent – between $1,000 and $1,900 for the average family health plan offered by small businesses. This is by virtue of the fact that AHPs would create more competition among insurers, and associations would essentially benefit from “buying in bulk” by insuring potentially thousands of members, rather than just a few employees from a small business. WHAT’S HOLDING IT BACK. National AHP legislation has already won approval in the House as HR 660 – a nearly identical version originally sponsored by former Congressman and now Governor Ernie Fletcher (R-KY). According to the Senate Small Business Committee, the legislation is more than 10 years old and has been adjusted and refined since it was first introduced. Having passed in the House of Representatives eight times, the bill has consistently stalled out in the Senate. By and large, this is a result of opposition from large insurance companies, which have, in some cases, threatened to withdraw their support from local chambers of commerce that choose to support AHPs. Likewise, large insurance companies that agree to cover small businesses may be the only one of their kind in a given state or region. These firms have consequently opposed the legislation in order to maintain their status as the sole insurance provider for their area. Additionally, some AHP opponents have described the legislation as a revenue boost for associations. However, the bill outlines that under the Employee Retirement Income Security Act, revenue from the plan must stay within the plan and go to the benefit of participants, either in the form of lower rates or more benefits. Moreover, arguments that associations would not be regulated regarding how much AHP rates would increase annually are countered by the notion that AHPs give associations another method by which to recruit new members. This puts little incentive on associations to increase rates and even if rates did go up, as is the nature of insurance, association members who choose an AHP would always start off with lower baseline premiums by virtue of being part of a larger group. |
“Skyrocketing health care premiums are crushing small business,” Snowe said. “In Maine, small-business owners have faced average annual premium increases of 15 percnet over the past three years. That means Americans throughout the country who received pay raises last year from small businesses saw them immediately negated by higher health insurance costs, leaving them unable to increase their standard of living.”
Association Health Plans (AHPs) are not a new concept. The House of Representatives has actually passed AHP legislation eight times; It’s the senate where the it grinds to a halt. “I have long pressed the Senate to act so we can provide our small businesses with the relief they desperately need,” noted Senator Snowe. “In the coming weeks, I will continue to work closely with the Bush administration, Majority Leader Frist and other members of Congress to ensure that Assocaition Health Plan legislation moves onto the Senate floor for a final, long-awaited vote. The Senate must pass AHP legislation this year so that millions of small-business owners can provide health insurance to our nation's most indispensable employees. Doing nothing is no longer an option."
A study cited by Senator Snowe called “Administrative Costs Accruing to Association Health Plans,” was conducted by the National Federation of Independent Business Research Foundation, which found that the administrative costs for Small Business Health Plans or AHPs are significantly lower than traditional HMO and PPO plans. The study follows President Bush's State of the Union address, during which he stated, “we must confront the rising cost of care” by “making sure individuals and small business employees can buy insurance with the same advantages that people working for big businesses now get.”
The key findings are:
- The administrative costs of AHPs are significantly lower than the administrative costs reported for other small insurance health plans, for-profit Medicaid plans, and not-for-profit Medicaid plans.
- The AHPs in the study exhibited long-term stability in administrative costs. The data suggests this is a result of effective cost management.
- Costs declined an average of 1.3 percent year-to-year, compared with Blue Cross Plans that exhibit increases in administrative costs of 6.1 percent annually.
- The presence of AHPs in the health-insurance marketplace increases competition and may contribute to containing the skyrocketing costs of employee-health benefits.
"I am absolutely committed to helping the National Federation of Independent Businesses enact legislation to expand health care options for individuals who work for small businesses through Association Health Plans," said Senator Snowe.
Association Health Plans are supported by the Professional Landcare Network (PLANET) as a way to help its members offset insurance costs.
"It’s still very expensive for association members to find health insurance and for those who have it, ever single year it keeps going up,” Delaney says. “What many businesses do every year – and something we even did with PLANET – is to switch insurance providers every so often in order to find the best rates. It can help with the costs, but you also have issues of your employees possibly having to find different doctors if theirs aren’t on the new plan, and also managing issues of pre-existsing conditions and how they’ll be covered.”
Delaney says PLANET continues to support the legislation and hopes that once it’s passed, PLANET and other industry associations will be able to find good insurance coverage for their members at reasonable rates.
| WHAT DO YOU THINK? |
A while back, only 48 percent of respondents to a Lawn & Lansdcape Online Poll reported that they were familiar with Association Health Plan legislation. Of those who were familiar with the legislation, 42 percent said the green industry needs this type of program and that they'd participate right away. Eight percent said the program would only be a temporary fix, while 25 percent each said they'd join if and when such a program showed success or that their insurance already was reasonable and they'd choose not to join. This month, look for a follow-up poll on this question to see where you and your industry colleagues stand on the issue today. The poll will run from Feb. 27 to March 5. Be sure to cast your vote at www.lawnandlandscape.com/poll. |