A Senate bill introduced last week seeks to ease rising health-care costs for smaller employers by creating insurance purchasing pools, a scheme lawmakers rejected two years ago.

The bipartisan bill, created by Sens. Dick Durbin (D-Ill.) and Olympia Snowe (R-Maine) after year-long negotiations with small-business trade and lobby groups, encourages states to set up health-care insurance pools and seeks to establish a nationwide pool by 2011. It also offers tax breaks for employee health-care costs. 

Unlike earlier efforts that sought to spread insurance costs over state lines through so-called association health plans, or AHPs, the current bill includes provisions aimed at safeguarding state health-care regulations.

Two years ago, Senate lawmakers blocked legislation allowing small businesses to buy insurance from national industry groups and trade associations. The American Cancer Society, the American Diabetes Society and other health advocacy groups have long opposed efforts to create AHPs that override state regulations. 

"Small-business owners across America are trying to do their part to help provide their employees with health insurance, but they are struggling with annual double-digit premium increases," Durbin said in a statement. "This bill helps solve that problem," he said.

A recent study by the Kauffmann-Rand Institute found that health-care costs had nearly doubled between 2000 and 2005 for businesses with fewer than 25 employees.