MAY 12, 2005 –- Association health plans (AHPs) will do little to cover the uninsured and will erode state laws that require insurers to cover preventative health care services such as well-child care and mammography screening, insurance and health care groups said Thursday.
The Blue Cross and Blue Shield Association, along with an array of patient groups such as the American Diabetes Association and the American Academy of Pediatrics, released a report that concluded AHPs would destroy an array of state-mandated consumer protections that include limiting how much and how often an employer's premiums can increase when an employee gets sick and requiring independent, external review when care is denied.
The groups said AHPs would also allow insurers to drop coverage for medical services that many states now require insurers to cover, such as diabetes supplies and education and colorectal cancer screening.
And AHPs would not have to abide solvency standards as rigorous as those set by many states, so some may not have enough cash reserves on hand to pay claims.
AHP legislation (HR 525),which President Bush and congressional Republicans have promoted as a way to encourage small businesses to band together to buy health insurance for their workers, passed a House panel in March and the Senate has held hearings on companion legislation.
AHP supporters say the complexity of complying with many different state insurance laws has discouraged small businesses from joining together to negotiate better prices for health insurance. Bypassing the state laws, they say, would help clear the bureaucratic path for AHPs and make health coverage available to more workers.
But Democrats and others who oppose the legislation have said they are concerned that insurers would have no incentive to cover preventive care or some expensive procedures if the law did not require them to do so. Kate Sullivan Hare, executive director of health policy at the U.S. Chamber of Commerce, said insurers offering AHPs would have to provide a comprehensive benefit package in order to be competitive with plans already on the market.
If a certain treatment or medical procedure is proven to be cost-effective "of course a health plan is going to be covering it," she said. She also said the plans would be required to be certified by the Department of Labor and pay annually into a fund that would cover claims of self-insured AHPs that became insolvent.
Opponents of AHPs predict that insurers will "cherry-pick" the healthiest individuals to cover, which will remove them from the greater risk pool and drive up health care insurance for everyone.
"Rather than lowering premium costs, research has found that a majority of small businesses will see their premiums go up under AHPs," said Debra L. Ness, president of the National Partnership for Women & Families. "Far from expanding coverage, AHPs could actually increase the ranks of the uninsured."
AHP opponents also point to findings from the Congressional Budget Office (CBO) that say while about 8.5 million people would obtain coverage from AHPs, under current law AHP enrollees would have been insured in the state-regulated market rather than being uninsured. CBO also estimates that about 10,000 people would lose coverage in response to rising premiums in the small-group market.