Association Health Plans - Making Insurance Accessible and Affordable
Over the course of the last few months, several articles have been published in Masonry about legislation that would allow national trade associations, such as MCAA, the opportunity to band together to purchase affordable health benefits for our members, their employees and their families. With health insurance premiums increasing at a staggering 15 to 25 percent per year for the last four years, I would encourage all of our readers to get behind the effort to enact this important bill into law. Association Health Plans (AHPs) would allow those who currently provide health benefits to their employees to be able to receive cost savings of as much as 15 to 30 percent per year and offer a more diverse array of health benefit options; meanwhile, many other companies would, for the first time, have the ability to provide health insurance to their workers.
This legislation, the Small Business Health Fairness Act (H.R. 660/S.545), has passed the House of Representatives six times, most recently in June by a 100 vote margin, including the support of 36 Democrats. It has yet to make it out of the Senate, however, notwithstanding the efforts of a coalition of more than 150 trade associations, including MCAA, representing over 12 million employers and 80 million employees.
There are several reasons why this legislation is being stalled in the Senate. For starters, the Blue Cross Blue Shield Association has made defeating this legislation their number one priority. The "Blues" have a monopoly on the small-group market, which also happens to be where the lion's share of their profits is generated. Many of you probably purchase your health insurance through a Blue Cross Blue Shield company in your state. Some of these Blue Cross companies also happen to be among the largest employers in several states. In fact, in many states there are no alternatives to the Blue Cross option and if there are other vendors, their plans are the same as those offered by the local Blue. Because small businesses typically do not have the resources to self insure like large corporations and unions, they are trapped in the state pools that have been structured and managed so that the only options they have for their insurance are the large insurance companies led by the Blue Cross organization.
Oddly enough, if the AHP legislation were enacted into law, the Blues could generate a great deal of new business. But their corporate response thus far has been to launch an online vacation sweepstakes that encourages participants to send letters to their Senators opposing AHP legislation. You'd think that a large corporation with numerous Washington lobbyists wouldn't need to stoop to such desperate tactics to defeat a bill.
The other problem is that the AHP coalition has yet to effectively counter state opposition. While the states argue that they should not lose their regulatory control over health care, a large reason why small businesses are in such dire straits with their health insurance needs is because of how the states have mismanaged their insurance markets by increasing the number of mandated benefits and imposing restrictive rating practices. Health care mandates drive-up the price, and the situation is further complicated by the lack of competition in the small-group market. The AHP legislation is a market-based initiative that would cost the taxpayer NOTHING, but would go a long way toward making health insurance accessible and affordable for the 42 million Americans currently without that benefit. The cost to the taxpayer to subsidize the health care needs of the uninsured is estimated at $130 billion – yes, billion – per year and many states are raising taxes to cover these costs. So how the states can justify opposing a bill that is revenue neutral and would actually save money is beyond my comprehension.
Worse still, the states and the Blue Cross organization have perpetuated the myth that Association Health Plans would allow organizations like MCAA to "cherry pick" only the healthiest individuals, leaving the states' small-group markets to care for the sickest individuals. The fact of the matter is that AHPs are strictly prohibited from being able to "cherry pick." Under the current Health Insurance Portability and Accountability Act of 1996 (HIPAA), an individual or employer cannot deny coverage based on health status or claims experience. AHPs are subject to all preexisting condition, portability, nondiscrimination, special enrollment and renewability provisions under HIPAA.
There is one more noteworthy fact: labor unions and large corporations already operate health care plans across state boundaries, but their plans' consumer protections are not considered weak. To the contrary, these organizations offer some of the best health care coverage in America – AHPs would do the same. The solvency standards, plan requirements and patient protections included in the AHP legislation are more stringent than those now required by many states. AHPs would level the playing field for small businesses, but in so doing, would not create unfair advantages for them.
Quite recently, MCAA sent a letter to each of you about this vital legislative initiative, asking that you contact your Senators and urge them to cosponsor S. 545 and actively support its passage. I hope you have taken the time to do that. If not, it's still not too late; simply go to www.senate.gov, click on your Senator's name and his or her contact information will be made available to you. The Association Health Plan coalition also has its own web site, www.ahpsnow.com. If you want to become more educated about this topic, I suggest you look at the extensive information and background material provided on the web. We MUST be at the forefront in the efforts to enact AHP legislation this year.
At the mid-year meeting in September, I will form a committee to investigate the variety of options available to MCAA to establish an Association Health Plan. That committee will report its findings on types of plans available, as well as the estimated cost savings to our membership, so that once this bill is enacted into law we will be well prepared to move forward in an expeditious fashion.
Again, I would strongly urge you to become knowledgeable about Association Health Plans and get engaged in the effort to make them a reality for our Association and others like it across the country. If AHP legislation is to become law, you must make your voice heard. Thank you for whatever support you can lend to this effort.
About the Author
William McConnell is the owner of Architectural Paving & Stone, Inc. He has served as President of the Mason Contractors Association of America and on the Board of Trustees for the International Masonry Institute. McConnell was a recipient of the 2005 C. DeWitt Brown Leadman Award.