March 15, 2006--After a decade of defeats on similar legislation, the Senate Health, Education, Labor, and Pensions Committee on Wednesday narrowly approved a bill that would allow small businesses to participate in association health plans.
The Republican majority in the committee was able to push the bill, sponsored by committee chairman Sen. Mike Enzi (R-Wyo.), closer to a full Senate vote by an 11-9 margin.
The current version of the bill, known as the Health Insurance Modernization and Affordability Act, would free small businesses to purchase health insurance across state lines from business groups, unions, or industry associations, and, presumably, would allow business owners access to larger risk pools and lower premiums.
"Today is the first major step in 15 years toward more affordable health insurance options for small business and working families," Enzi said today in a statement.
It is unclear, however, whether or not the current version of Enzi's bill will be able to succeed in the Senate. Hotly contested insurance-coverage mandates will dominate the debate on the issue, said Amanda Austin, manager of Senate legislative affairs for the National Federation of Independent Businesses, a Washington, D.C.-based lobbying group and longtime champion of AHP legislation.
"The concept behind the bill is something that everyone agrees on." Austin said. "I think we just disagree on how to get there. It's going to take a lot of discussion and education on both sides to get this done."
After significant revisions over the issue of insurance-coverage mandates, the current version of the Enzi bill requires insurers to provide plans that include benefits similar to those given state employees in one the five most populous states -- California, Texas, New York, Florida, or Illinois.
Although it preserves consumer protections established in some states, the bill overrides existent state price controls governing the insurance industry, which bill opponents argue will not lead to savings for small-business owners and their employees.
"This bill has been sold as a way for small-business owners to lower health-care costs," said Jerry Flanagan, health-care policy director for the Foundation for Taxpayer and Consumer Rights, a Santa Monica, Calif.-based consumer-rights group. "But this is all about giving more power to HMOs and insurance companies. It will give insurers more power to raise rates."
A Democratic alternative, proffered by Sen. Dick Durbin (D-Ill.), would seek to emulate the Federal Employees Health Benefits Program, which covers more than eight million people. Administered by the federal Office Personnel Management, the Democrats' plan would create one national small-business pool, but would also impose potentially costly state insurance coverage regulations and price controls.
For any type AHP legislation to become, NFIB's Austin indicated, some bipartisan consensus must be reached. Austin said bill opponents could seek to indefinitely extend the floor debate on the issue unless a cloture of 60% of Senate members is reached.