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Higher costs, more uninsured may lead to harmful legislation
Oct 1, 2003

FOR IMMEDIATE RELEASE

Recent studies showing more uninsured Americans and higher premiums for health care coverage are fueling support for Congress to take action.

The Small Business Coalition for Equitable Health Insurance is very concerned about the new figures released in September, but opposes Association Health Plan (AHP) legislation offered as a solution. Studies show that AHPs will have a negative impact on the small-business health care market and do not solve for the underlying reason for high insurance premiums: the high cost of health care.

The studies released in September include a report from the U.S. Census Bureau, Towers Perrin, and the Kaiser Family Foundation.

The U.S. Census Bureau estimated 43.6 million were uninsured in 2002 and coverage provided by employers has decreased from 62.6 percent in 2001 to 61.3 percent. The report indicates an increase in young, healthy individuals dropping employer-offered coverage added to the decrease. Thirty percent of the uninsured are 18 to 24.

Towers Perrin released their 2004 Health Care Cost Survey that shows companies today are paying two times what they paid in health care costs six years ago.

The Kaiser Family Foundation 2003 Employer Health Benefits Survey estimates that family plans are now costing $9,068 annually. This study also points to “rapid inflation in the costs for health care services and insurer’s efforts to emphasize profitability in their pricing” as a primary cause for the ongoing health care cost increases. Large firms (200 or more employees) are 34 percent more likely to increase health insurance costs for employees.

There is no doubt that these statistics are startling, but the proposed solution is worse.

Mercer Risk, Finance and Insurance Consulting conducted a study that estimates the four-year effect of AHP legislation will be a 23 percent increase in premiums for those left in the state-regulated market and one million more uninsured.

Eighty percent of small-businesses would pay more for insurance than they do now and only 1 in 14 participants of AHPs would be newly insured according to the Congressional Budget Office (CBO).

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