Capitol Corner

Uninsured numbers increase

A U.S. Census Bureau study released Sept. 30 shows the number of Americans who lack health insurance coverage increased by 1.4 million during 2001, bringing the total number of uninsured in the United States to 41.2 million. A majority of the increase resulted from those who had been getting health coverage from their jobs, especially if they work for small businesses. Factors in this pattern include small-business employers who stop offering insurance because of higher expenses and workers opting to drop coverage when their employers require greater co-payments for insurance costs.

According to The Washington Post, "The proportion of people who get insurance through their jobs dropped for the first time since 1993 from 63.6 percent in 2000 to 62.6 percent [in 2001]. This drop almost was entirely attributable to a decrease in employment-based coverage at companies with 25 [employees] or fewer. Coverage among workers at larger companies did not change."

U.S. Secretary of Labor Elaine Chao called upon the Senate to pass association health plan (AHP) legislation to help the uninsured gain access to quality, affordable health insurance. On Sept. 13 at a Capitol Hill press conference, Chao issued a report from the U.S. Department of Labor (DOL) supporting AHPs. Chao was joined by Sens. Christopher "Kit" Bond (R-Mo.), ranking Republican of the Senate Small Business Committee, and Tim Hutchinson (R-Ark.), as well as Reps. Ernie Fletcher (R-Ky.), Sam Johnson (R-Texas) and Cal Dooley (D-Calif.).

NRCA participated in the press conference and issued a press release applauding Chao for DOL's report, "Association Health Plans, Improving Access to Affordable, Quality Health Care for Small Businesses." The report verifies that small businesses are not on a level playing field when negotiating with large insurance companies and small-business workers pay more for health benefits than workers at large companies.

DOL's report finds AHPs will level the playing field by making it possible for NRCA and other associations to offer health insurance benefits to their members across state lines, giving small businesses economies of scale and purchasing power currently enjoyed by big businesses and large unions.

The report states, "AHPs will help small businesses lower administrative costs and receive more favorable treatment from insurers."

In a written statement issued at the press conference, Rep. Nydia Velázquez (D-N.Y.), ranking Democrat of the House Small Business Committee, said: "Not only is health insurance expensive, it is increasing every year. In 2001, insurance premiums increased almost 13 percent. AHPs are one way we can help small businesses band together and use their collective power to contain costs and provide health care for all their employees and their families. AHPs would allow small businesses to pool resources [and] negotiate collectively and save as much as 30 percent on health-care costs."

GAO report finds no competition

A cost driver of small-business health benefits is a lack of competition in the marketplace. According to a March 25 report from the General Accounting Office (GAO), "Private Health Insurance: Number and Market Share of Carriers in the Small Group Health Insurance Market," a handful of large insurance companies control the small-business health insurance market to the extent that meaningful competition is precluded.

Bond requested the report and stated, "You do not need to be an economist to understand that when competition in health insurance is anemic, those who need coverage the most are going to suffer from high costs and few choices."

Prospects for enactment

Before adjournment of the 107th Congress for November elections, Bond fought to get the Small Business Health Fairness Act (S 858), which would amend federal law to make AHPs possible, through the Senate and sent to President Bush. Sen. Kay Bailey Hutchison (R-Texas) signed on as a co-sponsor, and there may be an opportunity for passage when the 107th Congress returns for a "lame duck" session. If not, the fight will resume in the 108th Congress with prospects for enactment of AHPs improved with the restoration of a Republican majority in the Senate working in tandem with the president.

Craig S. Brightup is NRCA's vice president of government relations.