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House Passes AHP Bill, Health Insurers Oppose

The House of Representatives passed legislation on Thursday, June 19 that would allow smaller employers to join together to purchase lower cost health insurance for...
June 24, 2003

The House of Representatives passed legislation on Thursday, June 19 that would allow smaller employers to join together to purchase lower cost health insurance for their employees. The vote to approve H.R. 660, the Small Business Health Fairness Act, was 262-162.

The AHP proposals are controversial. Supporters say they will help reduce the number of people without health insurance by enabling small businesses to band together nationally and either purchase health insurance from a provider, or self-insure. Associations would be permitted to provide insurance to association members and their members' employees under the Employee Retirement Income Security Act (ERISA), which preempts state mandated benefits. The plans would be administered under the Department of Labor.Critics contend AHPs will actually cause more people to become uninsured by bringing about a two-tier system for health insurance, under which AHPs are regulated less than plans more heavily regulated by states.

President Bush, the U.S. Chamber of Commence and the National Federation of Independent Businesses have lined up in support of the proposal. Opponents include the Health Insurance Association of America (HIAA), the National Association of Insurance Commissioners (NAIC), various Blue Cross/Blue Shield associations and consumer groups. "It's simply not fair to America's workers to pass a federal law that allows one set of rules for those employers who can join an AHP, and a different set rules for identically situated businesses who don't," said Donald Young, MD, president of the Health Insurance Association of America.

What It Means to Agents: The focus now shifts to the Senate, where a similar bill, S. 545, has been introduced by Senator Olympia Snowe (R-Maine) and referred to the Senate Health, Education, Labor, and Pensions Committee.

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