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| 5.5.06 |
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| Primer: A Closer Look at the Proposed Law |
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A new piece of legislation - the Health Insurance Marketplace Modernization and Affordability Act - is set to be debated in the Senate within days. It would be the biggest reorganization of health insurance in decades, if it is passed. Those supporting the legislation say it would enable small businesses to afford health insurance and improve coverage for their employees. Opponents say the legislation could reduce benefits for millions of Americans and undermine critical consumer protections. Below is a brief description of the bill, including arguments both for and against it.
What is it? |
Who supports it? |
Who opposes it?
What is it?
The legislation would allow business groups and trade associations to pool their membership across states through so-called small business health plans to purchase group health insurance. It would set uniform federal standards for insurance products that have long been regulated by the states.
The bill is set to move to the Senate floor in the coming days. Similar proposals have been around for years and passed the House several times but never saw any movement in the Senate.
The bill, introduced last year by Senator Michael Enzi, R-Wyoming, and co-sponsored by Ben Nelson, D-Nebraska, and Conrad Burns, R-Montana, seeks to help small businesses afford coverage plans by permitting them to band together. Small companies that form such groups would be able to widen their risk pool, which in turn yields more competitive rates, at least in theory.
The bill also attempts to make health insurance more affordable by trying to streamline how insurance companies are regulated, according to a paper co-authored by Mila Kofman, a Research Assistant Professor, at Georgetown University's Health Policy Institute.
According to consumer and legal experts, under the proposed law insurers would be permitted to sell policies that are exempt from most state insurance regulations, which has caused outrage among groups who feel states should retain their regulatory rights.
Who supports it?
A number of business groups support the legislation, including trade associations representing real estate agents, restaurant owners and construction trades, as well as organizations such as the National Small Business Association (NSBA) and the U.S. Chamber of Commerce.
These groups say the bill will help small businesses and working families gain access to affordable health insurance that they now cannot afford.
"Although we still have some concerns, the NSBA believes the Enzi bill would help small businesses. It serves as a compromise between proponents and opponents of association health plans," Todd McCracken, president of the NSBA told NOW.
Other proponents, including the Bush administration, add that the proposal will free businesses from a patchwork of different state regulations making it easier and less expensive for insurers to compete in every state.
Although backers of the bill acknowledge some shortcomings, they also point to a survey, commissioned by the National Association of Realtors, which they say shows 89 percent of people support small business health plans.
"I've concluded that when it comes to health insurance in America today, there are two kinds of people. Those who don't have it, and those who do have it, but are afraid that they're going to lose it, because of the high costs, or it would become unavailable to them," Senator Ben Nelson, who co-sponsors the bill, told NOW.
Some supporters, including Senator Bill Frist, cite research by Mercer, Oliver, Wyman, Inc., which concluded that the bill, if implemented, would reduce the cost of health insurance for small employers by 12 percent. It added that the bill would also cover about 900,000 million uninsured Americans in working families.
Who opposes it?
A number of consumer advocates, insurance regulators and state officials have voiced concern about the legislation. These groups believe that it will reduce benefits for millions of Americans and undermine critical consumer protections.
Several groups representing people with specific diseases oppose the bill. "In one stroke, this bill would erase all that state legislatures have done to prevent and more effectively treat cancer," Daniel E. Smith, a vice president of the American Cancer Society, said.
Forty one state Attorneys General have also stated their opposition to the bill, which they say "would erode state oversight of health insurance plans, eliminate consumer protections in the areas of mandated benefits and internal grievance procedures."
In a letter to the Senate last month, the group pointed out that, if passed, the law would pre-empt state laws regulating all health insurance plans, not just small business health plans.
Kofman also believes that the proposed law would hurt consumers. "The bill will allow insurance companies to discriminate in ways they can't now. Many small businesses will see their premiums sky-rocket, especially businesses with older workers and with employees who need medical care. The bill will result in a loss of rights for consumers everywhere," she said.
Kofman and other critics say the legislation could result in health insurance coverage that does not cover much at all.
"The threat here is that these bare bones plans become ubiquitous in the market and draw people to them because folks are so desperate for affordable healthcare," Jerry Flanagan, a consumer advocate at The Foundation for Taxpayer and Consumer Rights, told NOW.
Like many opponents, Flanagan fears that people will no longer be able to sue their insurers for damages if Congress passes the legislation. "If you remove that legal threat, then insurers can deny coverage, deny treatments with impunity because there's no threat whatsoever-- if they do," he said
The insurance superintendent of New York, Howard Mills, said in a letter to Senator Hillary Rodham Clinton that the legislation could create severe problems because it would pre-empt a state law requiring insurers to set rates for small businesses and individuals without regard to age, sex, health status or occupation.
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