Capitol Hill

March 15 was a historic day for organizations such as NRCA that for years have lobbied Congress to pass association health plan (AHP) legislation. On that day, the Senate Committee on Health, Education, Labor and Pensions, chaired by Sen. Mike Enzi (R-Wyo.), approved and sent to the Senate S 1955—the Health Insurance Marketplace Modernization and Affordability Act of 2006. Its purpose is to facilitate creation of small-business health insurance pools across state lines, which are known as Small Business Health Plans or SBHPs. For all intents and purposes, SBHPs essentially are AHPs.

During the past decade, the House of Representatives passed AHP legislation no fewer than eight times, but this is the first time a Senate committee even has considered the issue—let alone approved it. Although the committee vote was 11-9 along party lines, S 1955 has a Democrat co-sponsor who is not on the committee—Sen. Ben Nelson (D-Neb.), who at one time was a state insurance commissioner. This is important because the National Association of Insurance Commissioners has opposed all previous AHP bills. However, they remain neutral on S 1955 because it provides a more visible role for state insurance commissioners in the oversight of SBHPs.

Opposition

Because states traditionally have regulated the sale of health insurance products, the National Governors Association remains opposed to S 1955. Organized labor and other entities that advocate government-run single-payer national health care are not supportive either. And perhaps the most vocal opponents are the patient-specific consumer groups that have been successful getting states to mandate coverage of their specific causes. For example, the American Diabetes Association is opposed because it believes SBHPs would be able to avoid state mandates on insurance coverage of medication.

In fact, S 1955 would enable SBHPs to offer an infinite array of health insurance plans across state lines, including plans not containing all the various options required by state mandates. The ability to offer standard benefit plans in all 50 states irrespective of state mandates would lower premium costs for roofing contractors and other small businesses. However, NRCA and other bona fide trade associations only could offer these plans to their respective members as long as the plans also offer an alternative containing the covered benefits offered in a state employee health plan in one of the five most populous states; currently, those states are California, Florida, Illinois, New York and Texas.

Everybody in the pool

NRCA is a member of the SBHP Coalition, which has seen its numbers grow in every successive Congress during the past decade. This is somewhat unusual because most coalitions tend to dissipate over time when legislation they support fails to pass. But the intense need to bring quality, affordable health benefits to small businesses is such that the coalition now has 200 members representing an estimated 12 million employers and 80 million workers.

SBHP Coalition members know it is crucial that small businesses be able to form insurance purchasing pools across state lines managed by associations to achieve the economies of scale necessary to bargain for more affordable insurance. Another important advantage of SBHPs is the ability to offer uniform national benefits with a uniform rating system. Furthermore, SBHPs would have lower administrative costs and introduce more competition into the small-business health insurance market.

When opportunity knocks

The Senate committee's approval of S 1955 presents the best opportunity for NRCA to offer health insurance benefits to its members throughout the U.S. It is expected the bill will be brought up for a vote in the full Senate this month. If it passes, it will be assigned to a conference committee of select members of the Senate and House to iron out differences between their respective bills and arrive at compromise legislation that could be sent to the president, who has indicated he will support AHP legislation.

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