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As part of a series of activities during
Cover the Uninsured Week in May, the U.S. House of Representatives approved for the second time a bill allowing small businesses to band together to purchase health insurance through federally regulated association health plans (AHPs).
The House passed the same legislation in June 2003.
But the victory may have been a Pyrrhic one for AHP proponents, who had hoped to build on last year's vote margin. While last year's vote was 262-162, this year's vote was 252-162. So while the same number of lawmakers opposed the measure as last year, support dropped off slightly.
Opposition remained steady in large part because Delta Dental and its more than 1,000 coalition partners, including the Blue Cross Blue Shield Association, the National Governors Association and the National Association of Insurance Commissioners launched a Web-based grassroots effort aimed at key members of the House. The coalition opposes AHPs as they would undermine state insurance laws and
segment insurance markets, leaving older and sicker small groups to bear higher premiums.
The House approved the AHP measure after rejecting a substitute amendment that would have created a small business health insurance pool, run by the federal government and mirroring the Federal Employees Health Benefits Program. The Democratic amendment,
offered by Reps. Ron Kind (D-Wis.) and Robert E. Andrews (D-N.J.), fell in a 193-224 vote.
Senate Action On AHPs Unlikely
The Senate remains divided over AHPs with even some key Republicans expressing concerns. Those include Sen. Judd Gregg (R-N.H.), who chaired a Senate GOP task force that on May 11 issued recommendations for expanding health coverage and lowering health costs.
The task force declined to recommend AHP legislation, but instead presented it as an option for consideration.
Nevertheless, Sen. James M. Talent (R-Mo.), a strong proponent of AHPs, has said he may seek opportunities to offer an AHP rider as an amendment when other legislation is debated on the Senate floor.
Malpractice Reform Adopted Again
The same day as the AHP vote, the House also approved, 229-197, legislation that would overhaul the medical tort system, placing a $250,000 federal cap on noneconomic damages and imposing other limits on medical lawsuits, including restraints on lawyers' fees.
The measure, identical to one passed by the House last year, provides for unlimited economic recoveries, but limits punitive damages to $250,000 or double the amount of economic damages awarded, whichever is greater.
The Senate has failed twice this year and once in 2003 to garner the 60 requisite votes to bring up medical tort system overhaul bills.
Heritage Gives Mixed Review
As the House prepared to send its health care proposals to the Senate, the Heritage Foundation offered a mixed appraisal of the policies incorporated into the proposals.
The Heritage Foundation is a research and educational institute whose mission is to formulate and promote conservative public policy.
In a paper posted May 12 on the Heritage Foundation's Web site, Nina Owcharenko described the House Republicans' AHP bill as "well-intentioned," but insufficient to address the problems of "over-regulated" state insurance markets that "have forced many small businesses to reconsider health insurance altogether."
Instead, Owcharenko urged Congress to facilitate "defined contribution" approaches to health insurance through which small businesses would provide a fixed amount for each employee to purchase coverage.
"Policymakers could also encourage states to reduce unnecessary mandates and regulations while designing a reliable and consumer-friendly marketplace based on
consumer choice and free-market competition," she wrote.
Owcharenko approved of ending the FSA "use-it-or-lose-it" requirement that makes holders of FSAs forfeit unused account balances at the end of the calendar year, but said that medical tort system overhaul falls in the domain of the states, not Congress.
Bob Moffit, director of the Heritage Foundation's Center for Health Policy Studies, echoed this sentiment. "It's not really constitutional for Congress to override state
tort laws." Owcharenko's paper is available at
http://www.heritage.org/Research/HealthCare/wm502.cfm.
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