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Conflict Developing Within AHIP over Enzi Bill

MAY 5, 2006 -- A battle is brewing on the board of America's Health Insurance Plans (AHIP) over legislation the Senate is scheduled to consider May 9 that would permit small businesses to bypass state insurance mandates.

While AHIP officially has taken no position on the bill (S 1955), its president Karen Ignagni has been pushing members who oppose the measure to find a way to support it in order to curry favor with Senate Health, Education, Labor and Pensions Chairman Michael B. Enzi, R-Wyo., the bill's sponsor. So say AHIP members who also are members of the Coalition to Protect Access to Affordable Health Insurance, a group of regional community-based plans that opposes Enzi's measure.

"Their logic is that Enzi is chairman of the committee and AHIP and its membership will have more issues before his committee, so we must accommodate Enzi," said an executive of a company on the AHIP board.

That strategy, the sources say, is designed to benefit larger AHIP members that operate nationally—and stand to make a lot of money if the Enzi bill becomes law—over community-based health plans that operate in just one state and would be hurt by the Enzi bill.

"There are a few plans that could make out extremely well under this bill," because it would allow insurers to avoid state laws governing areas such as rating rules, underwriting, and consumer protection, said another of the unhappy AHIP members. Community-based insurers have followed such state regulations for years and fear the Enzi bill would create an uneven playing field that will harm their health plans if new players do not have to abide by the same rules.

Some of AHIP's smaller to medium-sized members "feel in many cases we're being ignored and not getting a full hearing," one of the sources said. They also fear that any changes made in the Senate bill will lose out in a House-Senate conference to a far different version of small business health insurance legislation (HR 535) the House passed last year.

Mohit Ghose, a spokesman for Ignagni, said that AHIP and its staff have not taken an official position on the bill and have followed the directives of AHIP directors with regard to the Enzi bill.

"We have provided technical support and have been in on meetings with other stakeholders so we can continue to work with Chairman Enzi on this bill," Ghose said Friday. He also pointed to a March 7 letter to Enzi where Ignagni noted several concerns about the measure, including that the bill "is not entirely consistent with the principle of creating a level playing field and may have unintended consequences for consumers."

The Enzi plan would permit insurers to bypass state coverage mandates if they also sell at least one policy that matches a benefit plan offered to state employees of one of the five most populous states—California, Texas, New York, Florida, or Illinois. Provisions of the measure, however, are expected to change before Senate floor action begins as Enzi tries to build support for his bill.

Opponents say the legislation would leave people underinsured and would allow insurers to raise prices for older, sicker workers. But proponents of the measure, which include many business groups, say it is needed to help small businesses purchase affordable health care insurance for their employees.

The opposition of some AHIP members to the Enzi bill has created "a major stomachache" for Ignagni and the dissent "points out the inherent conflict in this organization" that represents insurers that vary in size and interests, one of the executives said.

One of the executives said that other AHIP members share their concerns but have been reluctant to join the fray. Nonetheless, the conflict "could cause deep divisions and permanent scars" within AHIP, the executive said.

But another dissenter said, "This is a battle; it's not Armageddon."

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