June 23, 2004 -- Last week, President Bush offered his support for legislation that would allow small businesses to band together across states to purchase health care.

The legislation would let small business owners purchase health coverage for their families and employees through national trade or professional associations in what is known as an association health plan (AHP). Proponents argue that the larger pool would give small businesses greater clout in negotiating insurance rates.

Bush gave his endorsement on Thursday at the National Small Business Summit, put on by the National Federation of Independent Business in Washington, D.C.

"Big businesses are able to spread risk, because they've got a lot of employees over which to spread risk," Bush said at the summit. "Small businesses don't have that same purchasing power in the marketplace. It makes sense to me to allow small businesses to bind together in order to be able to better afford insurance for their company."

The legislation has passed in the House of Representatives seven times, most recently in May. It is now awaiting debate in the Senate. The President has indicated he would sign the bill into law.

Currently, AHPs are only available within states and are governed by state mandates. The proposed plan would give the Labor Department oversight. In May, a Republican-led Senate task force failed to endorse exempting the plans from state coverage mandates.

Opponents, such as the National Small Business Association, a trade group similar to the NFIB, argue that, because the AHPs would be exempt from state laws, their benefits would be designed to be more attractive to younger, healthier workers, thereby weeding out those most in need of affordable care. Those left outside the plans would be faced with even higher costs.