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From the CQ Newsroom: Industry Group Backs Health Association Bill as States Push for Their Rights

APRIL 26, 2008 -- The National Federation of Independent Businesses came to the Hill on Wednesday with 450,000 signed petitions supporting legislation by Sen. Michael B. Enzi that would make it easier for small businesses to join together to offer health insurance.

However, a key moderate Republican signaled that the bill would be difficult to pass without some changes, and state governments contend it would usurp their right to regulate health insurance.

Enzi, a Wyoming Republican who is chairman of the Health, Education, Labor and Pensions Committee, said his bill (S 1955) would give small businesses "the power to negotiate together for the health benefits they want and need, at prices they can afford."

But Maine Republican Olympia J. Snowe has been a leading champion of her own small-business health legislation (S 406) and has not yet thrown her full support behind Enzi's measure. Most Democrats oppose the legislation.

Snowe was unable to attend Wednesday's news conference because she was chairing a committee meeting at the time, her spokesman said. But in a statement, she said, "We're further along on this issue than we ever have been."

Compromise for Support
She nonetheless called for changes in Enzi's proposal. "Only a compromise that has bipartisan support will be able to pass the Senate," Snowe wrote.

Enzi said he was running ideas by other senators to gather input and test out proposals. "It's been a very difficult process," he said, but predicted the final bill would have enough votes to surmount a filibuster and pass the Senate.

Support from Snowe, who pressed her case on small business health care in a meeting with President Bush on Wednesday, will be essential, so she is likely to win some changes to align the bill more closely to her version before the Senate takes up the issue in mid-May.

But even if Snowe and Enzi can agree on language, they will still need to convince Democrats to join them to get to 60 votes for cloture. To win over Democrats, they would most likely need to give some ground on the overriding of state coverage mandates.

During the markup of Enzi's bill last month, Democrats offered more than 20 amendments—most of which were aimed at preserving insurance coverage guarantees for specific diseases.

Enzi's legislation would retain state insurance oversight and enforcement, rather than shifting those duties to the federal Department of Labor, as Snowe has proposed.

Enzi's bill would allow small-business health plans to bypass state coverage mandates only 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. Snowe's plan has no such requirement.

Coalition of Opposition
Opposition to Enzi's bill has drawn together an unusual coalition of interest groups.

On Tuesday, 39 state attorneys general sent a letter to Enzi to convey their "strong opposition" to the bill.

"Consumers rightfully expect their state government to require a minimum of health benefit protections. . . . Elimination of strong state protections in exchange for weak federal oversight fails consumers," they wrote.

State insurance commissioners also have lined up against the legislation.

The liberal Center on Budget and Policy Priorities released a report Wednesday saying that instead of making coverage more affordable across the board for small businesses, the Enzi bill would create winners and losers in that segment of the market.

Small businesses with older and sicker employers, or those who had just one employee who is sick or has a history of costly illness, would be particularly vulnerable to sharp premium hikes, the report said.

Sweep Away the Rules
The Enzi bill would "sweep away the rules that most states use to limit the degree of variation in the insurance premiums that small employers are charged," according to the report.

In a separate report released Wednesday, the group found that after New Hampshire adopted measures similar to the Enzi bill, 65 percent of employers with between two and nine workers saw premium hikes of 30 percent or more.

New Hampshire repealed the law because of complaints received from small business, said Edwin Park, speaking for the group.

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