Small-business insurance groups likely;

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After seven flops, Senate on verge of acceptance

Arizona Daily Star

Tucson, AZ — A bill allowing small businesses to join each other in multi-state associations to buy health insurance has succeeded where at least seven of its predecessors have failed.

Earlier this month, a U.S. Senate committee voted in favor of the 2005 bill titled “The Health Insurance Marketplace Modernization and Affordability Act,” making it the first association health plan bill to go before the full Senate for a vote.

Since the House has passed a similar bill, that’s the last hurdle before going to the president for his signature.

The bill, introduced by Sen. Mike Enzi, R-Wyoming, in November , would permit the formation of “small-business health plans.” These are “group health plans sponsored by trade, industry, professional, chamber of commerce or similar business associations,” according to a congressional summary.

What has separated this from prior legislative attempts to establish association health plans is the involvement of various interest groups representing the insurance companies, state insurance regulators and the business community, said Amanda Austin, manager of legislative affairs at the National Federation of Independent Business in Washington, D.C.

“The key here is choice,” she said. Statistically 51 percent “of the 46 million uninsured work for small businesses. Something is not working. Let’s inject more competition into this market.”

The concept of small businesses joining together to buy health insurance would not be entirely new to Southern Arizona, said Hank Peck, senior vice president of Compass Insurance in Tucson.

“We’re fortunate in Tucson to have Pima Community Access Program and the Healthcare Group (offered by University Physicians). So we have some options here,” he said.

Enabling the associations to pool members across state lines would give them greater purchasing power, say proponents of the plans such as U.S. Rep. Jim Kolbe, R-Ariz., who co-sponsored the House version of the bill, the Small Business Health Fairness Act of 2005.

“They increase the buying and bargaining power that an individual small business would not have by itself,” Kolbe said in a statement following the House passage of the act last fall.

One of the law’s supporters is Small Business Health Plans Now, an association of more than 170 national groups representing more than 12 million employers.
In its defense of the proposed association health plans, the associations says they “could save small businesses an estimated 15 to 30 percent compared with the cost of purchasing coverage directly from an insurance company.”

Opponents of the association health plans argue the current legislation will let insurers in the new plans ignore certain state mandates so long as they offer at least one comprehensive benefit equal to those provided to state employees by the five most populous states.

In a letter to Enzi, representatives from the Santa Monica-based Foundation for Taxpayer and Consumer Rights says the “legislation removes all requirements that the federal rules incorporate, let alone improve on, the state law they replace.”

Similar arguments prompted a nay vote from Rep. Raúl Grijalva on the House bill that eventually passed, said Natalie Luna, spokeswoman for the Arizona Democrat.
Neither of Arizona’s U.S. senators, Jon Kyl and John McCain, has declared his intentions with regard to the Senate bill, although McCain was a co-sponsor of an earlier, similar piece of legislation.

Said Peck, the insurance broker: “As it stands, it (the bill) appears to be a good collaborative effort on the part of a lot of different parties.”
Whether the bill will have much impact in Arizona remains to be seen, however.

“At first everybody might say, ‘I’m signing on to that association plan.’ But if they felt their plan was better, they’d leave. In time the market would level itself out,” Peck said.

Consumer Watchdog
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