Association health plans (AHPs) would hurt consumers

February 13, 2004

"Association health plans" (AHPs) would hurt consumers

Fri Jan 23, 6:27 AM ETUSATODAY.com By Scott P. Serota "Association health plans" (AHPs) sound too good to be true. And they are. AHPs offer little help to employers and would strip away critical state consumer protections from coverage sold to small employers - with no replacement.

The nation must deal with the problem of the uninsured - especially small employers that often have small profit margins and low-wage workers who can't afford their share of the premiums. As part of our continuing efforts to keep health care affordable, Blue Cross and Blue Shield has proposed a comprehensive range of legislative options that would help employers offer coverage and employees pay their share. The deregulation of insurance companies that sell to association groups - the AHP proposal - would put consumers at risk and destroy any confidence that their health plan will be there to pay the bills.Thousands of AHPs exist today and benefit their members by "banding together" to purchase coverage. However, they are regulated by the states. It's a bad idea for Congress to roll back consumer protections that apply to insurers that contract with these associations. Consumers have demanded these protections to ensure the security and dependability of their coverage.One very important state protection ensures that groups with higher costs - those with older or sicker workers - are not victims of unlimited and frequent (monthly) premium increases. Contrary to some claims, these rules would not apply to the proposed AHPs. Studies by the Congressional Budget Office (news - web sites) and others show that under this scheme, premiums increase for most firms, and older and sicker groups lose coverage altogether. Other key protections also would be abandoned: the right to appeal to an independent third party when a claim is denied, access to medical specialists and emergency room care.Some argue the proposal should at least be tried. However, governors, state legislators, attorneys general and insurance commissioners are opposed; they know unregulated AHPs have been tried and failed miserably. The experiment resulted in rampant fraud and abuse that left consumers and providers with $123 million in unpaid medical bills. States once again would have to deal with the resulting disaster. They, not Washington, would have to explain to a family why it lost important protections. Along with state officials, 900 organizations - from local Chambers of Commerce to farm bureaus - and hundreds of thousands of small businesses oppose this proposal. The American Nurses Association, American Academy of Pediatrics and American Diabetes Association also are opposed; they ask who will step in for the states to ensure that mammograms, diabetic supplies and preventive care are covered. All agree that unregulated AHPs are bad public policy. Scott P. Serota is president and CEO of the Blue Cross and Blue Shield Association, the trade group representing 41 Blue Cross and Blue Shield companies.http://story.news./news?tmpl=story & u=/usatoday/20040123/cm_usatoday/planswouldhurtconsumers