Association Health Bill Fails Despite Senators’ Support

Patient advocacy groups work overtime to kill legislation that businesses felt would have provided less costly coverage for their employees

John Carroll

In the end, some of the most influential public support for opposition to a Senate bill backing low-cost association health insurance was drummed up by a red push-up bra. In a demonstration of their collective political clout, patient advocacy groups offered up a provocative campaign to make a point with select constituents: Don’t encourage women to accept the stripped-down coverage that would be left to them under the association health plan bill presented by Wyoming Sen. Mike Enzi, a Republican.

To help make sure they got the point, a legion of lobbyists representing the collective clout of more than 200 patient advocacy groups swarmed Capitol Hill in early May to blitz lawmakers with their concerns. The bra-centered ad campaign was targeted right at the home turf of political moderates whose swing votes could make all the difference in a close vote.

With insurance groups, including the influential America’s Health Insurance Plans, resolutely stationed on the sidelines, it all proved too much for business organizations such as the National Federation of Independent Business (NFIB)and the National Association of Realtors (NAR) to overcome. Forty-three senators joined to oppose the bill — just enough to prevent backers from gaining the 60 votes needed to limit debate and push the bill through. It was, said NFIB CEO Todd Stottlemyer, “incredibly disheartening that a minority of U.S. senators, many of whom make great show of their support for small businesses, used Senate rules to block a final vote on legislation, favored by a clear majority, to provide lower-cost health care options for small-business owners, their employees, and their families.”

Opponents, though, were celebrating the turn of events after spending days nervously counting votes and working to line up political moderates in their corner. Diabetics, said the American Diabetes Association’s chair for national advocacy, L. Hunter Limbaugh, had “dodged a bullet.” Depending on which side you were hearing from, the Health Insurance Marketplace Modernization and Affordability Act of 2006 would have:

  • Provided small businesses a chance to band together and leverage big numbers of employees for lower insurance rates for plans that could be offered across state lines, making health insurance at long last affordable to a million people who currently don’t have health coverage.
  • Stripped away the protections afforded by state mandates, leaving patients vulnerable to cancer and other maladies while watching businesses shift their employees from complete coverage to bare-bones offerings.

In early May the American people — or at least the ones tuning in to a burst of news coverage — were getting hit with both sides as the bill was taken up by the Senate. Those were just the headlines of legislative combat. Behind the campaign slogans lay a multitude of details that tripped up supporters and will probably preoccupy lawmakers laying the groundwork for the next legislative push for an association health insurance bill. This time around, though, insurers couldn’t find enough common ground to encourage them to rally together in a fight either for or against the bill.

Objections to special status

Early in March, AHIP President Karen Ignagni endorsed the move in Congress to provide more affordable health insurance while laying out a series of problems the association had with Enzi’s bill. In a letter to the senator, Ignagni objected to the special status that association health plans were being given which amounted to a free pass on the certification process that others in health insurance have to deal with. The association also noted that setting up two kinds of insurance — a low-cost, mandate-free policy to be offered to workers alongside a “comprehensive” plan — would be likely lead to adverse selection, with companies that have a low need for insurance opting for the bare-bones plan and high-need companies choosing comprehensive plans. Any shift of the sick into comprehensive plans, she wrote, would almost certainly drive up those plans’ prices.

Others said the legislation had driven a wedge between the big insurers likely to benefit from the market created by the Enzi bill and smaller insurers that saw themselves facing an onslaught of unwanted competition.

“We feel the legislation as written really helps larger insurers to the detriment of smaller insurers,” said Merrill Matthews, PhD, director of the Coalition for Affordable Health Insurance, which includes insurers among its members. The bill “helps insurers that sell across a wide range of states rather than those that are regional.”

Blue Cross & Blue Shield’s national group led the coalition against the House movement on association plans, says Angie Montes, director of federal government affairs for the American Diabetes Association. But when the issue went to the Senate, she adds, the Blues were split between the plans that would do well under Enzi and those that wouldn’t.

Health insurance groups of every stripe have frequently objected to state mandates over the years. “It’s like a Cadillac loaded with options,” says Matthews. “If someone pays that for you, fine. But it’s not affordable to everyone.

“Most of the mandates, taken individually, don’t have a big impact,” he adds. But when states average about 35 mandates each and each one bumps up the cost of a policy by half a percent, collectively the mandates make insurance far more expensive. However, the Enzi bill tackled mandates in a way that alienated patient groups without winning over the health insurance industry.

In an effort to present a compromise of sorts to senators, the Enzi bill required that employees be offered not only mandate-free coverage but another plan that was comparable to a comprehensive health insurance plan offered to state workers in one of the five most populous states.

Given the fact that these state employee plans are generally quite comprehensive, it’s not much of an alternative for someone looking for an affordable plan, says Matthews. And Matthews was also critical of a board of standards that would be set up under Enzi. Congress should not negate states’ authority in health insurance and then turn over responsibility for much of their work to a non-elected group.

There were plenty of details that troubled patient advocates as well. “If you look at those plans, there’s a lot of variance there,” says Montes.

For now, the Enzi bill seems to be fading fast, and the NFIB does not see its resurrection likely during this session.

Still, the NFIB saw real progress on an issue that has been up for more than 10 years. The House passed its original association health bill in 1995 and the Republican majority was quick to back it on seven more occasions. Until this session, an association health bill had never made it out of the Senate committee.

John Carroll, a freelance writer living near Austin, Texas, has been a contributing editor of Managed Care for four years.