Email this article | Printer friendly page

President's State of the Union endorsement of AHPs shortsighted
Jan 20, 2004

FOR IMMEDIATE RELEASE

WASHINGTON, D.C. – President Bush called for Congress to pass Association Health Plan (AHP) legislation in his State of the Union address this evening, calling it a solution for small businesses struggling to provide health insurance to their employees. This legislation would allow national trade associations to sell insurance plans throughout the country without state oversight.

“AHPs gain their pricing advantage by avoiding the rules,” said Todd McCracken, president of the National Small Business Association, a coalition member. “They do nothing to address the underlying cause of high insurance premiums, which are rising health care costs.”

The legislation essentially creates two markets for health insurance, the federal AHP market and a state-regulated market. In the AHP market, health plans could be designed to attract healthier groups who would seek lower prices and require a lower level of coverage. In the state-regulated market the less healthy, who need many of the services the state requires, would be forced to pay higher premiums.

A recent study by Mercer Risk, Finance and Insurance Consulting shows that those not participating in AHPs would experience premium increases of 23 percent, while the entire small-business market would experience a six percent average premium increase, on top of the double-digit annual increases small businesses are already struggling to afford. The study also shows that premiums would increase enough in the state-regulated market to force one million individuals to drop coverage altogether.

The Small Business Coalition for Equitable Health Insurance is a coalition of concerned small business organizations seeking a fair and equitable solution to rising health insurance costs for small businesses. For more information, visit sbhealthequity.org.

Files require free Acrobat Reader