Association Health Plan bill gains momentum

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If passed, bill would expand health insurance options for veterinarians

n Feb. 11 in Washington, D.C., as residents responding to new terror alerts flocked to hardware stores for supplies and police manned D.C. metro stations, several government officials inside the Capitol turned to the issue of health care. Senators, representatives, and others forcefully argued for the reintroduction of Association Health Plan legislation at a standing-room-only press conference.

At press time, the bill had been introduced in the House of Representatives and was expected to soon enter the Senate. If passed, it will have important ramifications for many veterinarians, greatly expanding their health insurance options.

Small business blues
Today, roughly 43 million people in the United States are without health insurance, and surprisingly, many of them are gainfully employed. So what's the problem?

More than 20 million people who are uninsured reside in families employed by small businesses that cannot afford to offer health insurance to their workers. Over the years, mounting state regulations and rising coverage costs have taken their toll, and the small employer group health insurance market is struggling.

According to a recent study by the National Association of the Self-Employed, "Affordability in Health Care: Trends in Micro-Businesses," 70 percent of a surveyed 2,000 micro-business owners with five employees or less did not have health insurance for themselves or for their employees. Owners cited cost as the main barrier.

Veterinarians, most of whom work in or own small businesses, have also been hurt. Some relied on the AVMA Group Health and Life Insurance Trust for coverage.

Formed in 1956 to offer insurance to member veterinarians and their families, the GHLIT expanded its offerings in 1968 to include an option for practice owners to provide medical, disability, and term life insurance for their nonveterinary staff members. Rising costs and burdensome regulations, however, forced the GHLIT to discontinue its nonveterinary staff plan in 1994. And even worse, in seven states, the GHLIT is precluded from offering any insurance to AVMA members at all.

On the basis of rough estimates, state regulations that restrict access to health care insurance coverage disenfranchise more than 200,000 members of the veterinary community.

AHPs to the rescue
Many individuals believe unshackling association health plans, such as the GHLIT program, can help solve the insurance crisis. Revitalized AHPs would allow small businesses to band together across state lines, through their membership in a bona fide trade or professional association, to purchase health coverage for their families and employees at reasonable rates.

For AHPs to work, federal law needs to be changed to allow them to operate under the same uniform rules that now govern large employer and union health plans. Under the proposed legislation, AHPs would not be regulated by the states. Instead, they would be regulated under the Department of Labor. And because AHPs can operate the same way as health plans sponsored by Fortune 500 companies, small and medium-sized businesses, those with 500 employees or less, would be able to obtain the same economies of scale, purchasing clout, administrative efficiencies, and plan design flexibility for their workers as large businesses.

The Department of Labor estimates that small businesses can expect to save nine percent to 25 percent of the cost of their health insurance premiums through the proposed bill.

"By allowing them to pool their buying power and spread their risks, AHPs will put small business on equal footing with large businesses and unions," U.S. Labor Secretary Elaine Chao explained.

Opponents argue that the new bill could result in AHP cherry picking, where only the healthy receive coverage. Under the Health Insurance Portability and Accountability Act, however, adverse selection is already illegal. Association Health Plans must market to, and accept, all member employees, regardless of claims history or health status, and health plans can't charge higher premiums for sick employees.

Other opponents say that the proposed bill will increase fraud. Supporters, however, say the bill protects against this by strictly defining what constitutes a legitimate multiple-employer health plan. The Department of Labor says it will police association plans vigilantly.

In the past several years, AHP legislation has been proposed and passed in the House of Representatives but has had trouble in the Senate. On Feb. 11, a new bill (H.R. 660) was introduced and referred to the House Committee on Education and the Workforce. At press time, Sen. Jim Talent (Missouri) said he hoped to introduce the bill in the Senate in the next few weeks and push it through quickly. He will join Sen. Christopher Bond (Missouri) and primary Senate sponsor Olympia Snowe (Maine), the chair of the Senate Small Business Committee. The bill, also known as the Small Business Health Fairness Act, already has more than 70 co-sponsors in the House.

Growing support
Only time will tell whether the bill will succeed, but some politicians are optimistic. Hard-hitters such as Labor Secretary Chao, Small Business Administration Administrator Hector Barreto, House Education and Workforce Committee Chairman John Boehner (Ohio), and House Small Business Committee Chairman Don Manzullo (Illinois) exercised their enthusiasm for the bill at the February press conference in D.C. Other supporters include Reps. Sam Johnson (Texas), Ernie Fletcher (Kentucky), and Cal Dooley (California).

"Common sense tells you that it is going to be a whole lot better for all those millions and millions of Americans who work for small businesses, many who don't have health insurance," said Sen. Talent. "It's been done in the House. The president supports it. I see the support growing in the Senate."

Also promising is the support from small business. Almost 80 percent of the 2,000 businesses that were surveyed in the recent study by the National Association of the Self-Employed said they would participate in an AHP, if they received group purchase price breaks. Seventy-five percent said they would be motivated to participate in plans, if they had more choices in benefits or if paperwork and administrative burdens weren't as daunting.

The Association Health Plan Coalition, made up of more than 80 organizations, many of whom represent small businesses, has also been lobbying for the bill for several years. Members include the American Chamber of Commerce Executives, American Small Business Association, American Farm Bureau Federation, and the AVMA.

The AVMA sees the bill as a way to restore the GHLIT's strength. "If this important legislation passes, it would allow two very significant changes in the GHLIT's available coverage," said Dr. Janet Donlin, AVMA associate executive vice president and a GHLIT ex officio trustee. "First, it would enable the AVMA GHLIT to resume its provision of group medical coverage to AVMA members located in Maine, Massachusetts, New Hampshire, New Jersey, North Dakota, Vermont, and Washington. Second, and just as significant, is that the GHLIT could offer medical coverage to the nonveterinary staff who are employed by AVMA members."

And this is good news to Dr. Henry Childers, the AVMA Executive Board District I member, who represents veterinarians in four of the disenfranchised states. "Access to quality health care insurance coverage for themselves and their employees is the number one issue facing the private practitioners residing in my district, and they are looking to passage of this piece of legislation to address this critical concern."

The AVMA encourages members to contact their representatives in Washington, D.C., to support passage of the Small Business Health Fairness Act.