(NUI) - Congress is considering legislation that would exempt Association Health Plans from state laws and established consumer protections.
AHPs are health insurance arrangements sold by business associations. These types of plans currently exist in the state-regulated market but would be regulated by the U.S. Department of Labor under the proposed bill.
While proponents argue this legislation would benefit the small-business community, most health policy experts say it would actually be disastrous for small employers and their workers.
States have enacted laws to ensure that the health insurance plans offered to small employers and their families are fairly priced and pay health bills on time. But, small employers who join these AHP insurers would lose these important safeguards.
For example, individual states have enacted laws that require insurance companies to cover certain medical procedures and treatments. Federal AHPs would be exempt from covering key consumer protections that are set forth by individual state regulation.
Some of these benefits include mammography screenings, mental health services, maternity care, well-child care, alcoholism and substance abuse treatment. Patients would also lose the right to appeal to an independent third party when a claim is denied, to have access to medical specialists and to receive emergency room care.
The nonpartisan Congressional Budget Office found that the passage of AHP legislation could mean increased premiums for 75 percent of small employers and their families. In addition, older and sicker workers could lose coverage altogether.
Furthermore, a recent Mercer Consulting study indicates that the number of uninsured would increase by 1 million people, and health insurance premiums would increase by 23 percent for small employers that continued to purchase state-regulated coverage.
Federal AHP legislation could result in the kind of massive consumer fraud and abuses seen in the 1980s that left consumers with millions of dollars in unpaid medical claims.
A coalition of more than 1,000 groups, including consumers, small businesses, health care providers and state officials, oppose AHP legislation. This coalition is concerned that AHPs would hurt, not help, small employers and their workers and take away key health protections that millions of Americans have today.
