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House Panel Approves Association Health Plan Measure

March 16, 2005—The House Education and Workforce Committee approved a bill Wednesday that would help small businesses purchase health insurance after narrowly staving off adoption of an amendment aimed at making it more difficult for insurers or companies to discriminate against higher-risk patients.

The panel voted along party lines 25-22 to adopt the bill (HR 525), which would allow small businesses that band together into association health plans (AHPs) to bypass state laws that mandate coverage for specific treatments and procedures. Olympia J. Snowe, R–Maine, introduced a similar bill (S 406) in the Senate.

Opponents said one section of the bill would allow companies and insurers to discriminate against older workers or other high-risk employees by increasing premiums dramatically for those groups. Democratic lawmakers said companies who employ a large number of women, for example, might be charged higher premiums, leading employers to steer away from hiring women.
Rep. Charlie Norwood, R–Ga., who supported the underlying bill, offered an amendment he said would prevent such "cherry-picking." His amendment would have struck language from the bill that he said could be read as giving insurers a wide berth in setting rates for different groups, which could lead to premiums so high that high-risk patients essentially would not have access to insurance.

Norwood said the language he wanted to strike from the bill was ambiguous enough that it would end up being disputed in the courts, and he urged a clarification of the bill's intent.

"If we mean there is no cherry-picking, let's say that," he said.

Rep. John A. Boehner, R–Ohio, and bill sponsor Rep. Sam Johnson, R–Texas, said the amendment was not necessary. They said the bill's language was clear in its intent and insurers would be subject to the state law where the AHP was established in deciding how they determine coverage rates.

Norwood pointed out AHPs would simply set up in states with the most lenient laws.

Joined by one other Republican, Rep. Tom Price of Georgia, and all the Democrats present, the amendment was defeated on a tie vote of 24–24.

Supporters of AHPs say the complexity of complying with many different state laws have discouraged small businesses from joining together as AHPs to negotiate better prices on health insurance. Bypassing the state laws, they say, will ease the bureaucracy for AHPs, and ensure more Americans have access to coverage.

Democrats, however, said they were concerned that insurers would have no incentive to cover preventative measures or some expensive procedures if the law did not require them too.

Democrats offered a series of amendments—each defeated along party lines—that would maintain state mandates for coverage of specific treatments, supplies, and preventative care such as diabetes supplies and treatment, breast cancer screenings, autism treatment, mental health treatment, maternity coverage, contraceptives, and childhood checkups and immunizations.

Rep. Ron Kind, D–Wis., offered a substitute that would have used federal funding—made available by changing tax laws for off-shore companies—to assist small businesses with premium costs and set up a national health insurance pool modeled after the Federal Employee Health Benefits Program.

Kind's amendment was defeated 22–21 along party lines.

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