Earlier this month, Sen. Mike Enzi (R-WY), chairman of the Senate Health, Education, Labor, and Pensions Committee, introduced legislation that aims to help small businesses and their employees increase access to affordable health insurance plans. The legislation, the Health Insurance Marketplace Modernization and Affordability Act of 2005 (S. 1955), "would allow businesses and trade associations to pool their members in Small Business Health Plans in order to purchase insurance coverage at rates available to large groups," according to the National Retail Federation (NRF).
S. 1955 is "intended to break the years-long logjam that has blocked Congress from authorizing the creation of Association Health Plans (AHPs) to help small businesses meet rising insurance costs," noted NRF. The House has repeatedly voted in favor of AHP legislation in the past, but the Senate has not yet considered an AHP bill, as reported by the San Jose Business Journal.
It is hoped that Enzi's legislation will change all that by addressing the key apprehensions of insurance companies and state regulators that kept the Senate from even addressing AHP bills, the Business Journal noted. Unlike previous bills, S. 1955 calls on states, rather than the federal government, to regulate the plans, thereby reducing the chances for fraud, the Journal explained.
"We are nearing almost five years of double-digit growth in health insurance premiums -- increases that have repeatedly exceeded more than five times the rate of inflation," Enzi said in a press statement. "This inflationary spiral is lowering the quality of life for countless families and [is] hurting our economy. But those hardest hit are America's small businesses and their hard-working employees and families. Never before has there been a more urgent need to encourage market reforms like those proposed in this bill."
S. 1955 will permit businesses and trade associations to pool their members independently, though it will not allow them to establish self-insured plans. At the same time, Enzi's bill will make it easier for AHPs to offer the same policy in more than one state since it will allow group health insurance plans to opt out of mandated benefits that are not required by at least 45 states, rather than being forced to create insurance plans based on each state's particular coverage mandates.
Enzi noted that his bill is designed to enhance the market leverage of small groups as well as individuals by giving associations a meaningful role on a level playing field with other group health plans; streamlining the current "hodgepodge" of varying state regulations; preserving the primary role of the states in health insurance oversight and consumer protection; making lower-cost health plan options available; and achieving meaningful reform without a big price tag.
The bill is the result of more than a year of negotiations and responds to pleas from the small business community to be allowed to pool their members and provide group health insurance, called Small Business Health Plans, Enzi said. --David Grogan