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Senate Health Plan Legislation Opposed by ACS
A letter-writing blitzkrieg has, for the time being, halted the momentum of a U.S. Senate move to create national rules for health insurers that could change access to some patient protections, including state-mandated cancer screening.
The opposition campaign, launched in May by the American Cancer Society, along with the AARP and the American Diabetes Association, raised public concern about the legislation, which would allow associations and other small business insurers to create their own health plans. These multistate plans, called association health plans (AHPs), could then circumvent a myriad of state regulations, including health benefit mandates.
The 2-week campaign generated more than 170,000 e-mails and 9,000 telephone calls to lawmakers, which may have helped stop an effort to rapidly push the AHP measure through the Senate, said Daniel Smith, vice president of federal and state government affairs for the ACS.
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"People did not fully recognize, going into this debate, how much cancer patients and their families cared about this particular issue," Smith said.
The bill, S. 1955, the Health Insurance Marketplace, Modernization, and Affordability Act, aims to tackle the lack of affordable health insurance for small businesses and the self-insured by allowing associations to offer insurance across state borders without complying with each of the differing state laws. It would instead require a federal panel to draft a whole new set of national regulations allowing member-based associations to sell the same health insurance products nationwide.
That ability would enable associations representing small- and family-owned businesses to pool their members across the country and use this combined buying power to negotiate better deals from health insurers, according to the bill's author, Sen. Mike Enzi, (R-Wyo.).
"If [association health plans] can harness the power of America's small-business owners, it would force the entire marketplace to respond. If we transform health insurance to a market where small employers and family-owned businesses can demand better benefits at better prices, insurance companies would be forced either to keep up with the competition or lose their market share," Enzi said in a statement.
The controversy comes from provisions that would exempt association health plans from some state laws, including those that currently require insurers to pay for cancer screening. Currently, mammography screening is mandated in 49 states, colonoscopy in 22, Pap smears in 26, and prostate-specific antigen tests in 27. (See table, p. 1034.)
Also, the proposed bill would bypass rules in 19 states that require health plans to pay incidental costs, such as routine bloodwork, associated with clinical trial participation. That change could create a strong disincentive for patients to take part in drug studies, Smith said.
Associations Want Insurance
"The American Cancer Society has used a great scare tactic," said Joseph Rossman, vice president of fringe benefits for Associated Builders and Contractors Inc. In effect, the legislation would allow association health plans to act more like large corporations that follow federal rules in insuring their own employees and thereby take advantage of economies of scale, Rossman said. Self-funded health plans are exempted from state laws and most state regulations.
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"Our only goal is to help small employers afford health insurance," he said.
The members of the association's board would not only negotiate the details of the health plan but also would be covered by that insurance, giving them a strong incentive to provide as comprehensive a package of benefits as possible without breaking the bank, said Marcia Salkin, a senior policy representative with the National Association of Realtors.
Of her association's 1.25 million members, 28% don't have health insurance. That is twice the uninsured rate of just 8 years ago. If the realtors group could offer affordable health insurance, they could potentially cover as many as 800,000 realtors and their dependents, she said.
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Before state benefit mandates became so numerous, associations were able to offer their members affordable health coverage, Salkin said. But now that there are more than 1,800 state mandates across the country, the environment for offering coverage has become complex and costly.
Rossman's association has always offered health coverage to its members, but that has become increasingly difficult as state regulations have expanded over the years. Those regulations, although no doubt well intentioned, increase the price of coverage, he said.
"You can mandate all the benefits you want, but if no one can afford to buy coverage it doesn't really make much difference," he said.
Health Groups Fight Back
On the flip side, ACS's Smith asked, what is the point of coverage that doesn't pay for the services you need?
"We, like everyone, are all for giving more people access to insurance, but the quality of that access, the quality of that insurance product is equally important," he said.
That's why they fought so hard against the bill earlier this year. The campaign against S. 1955 was coordinated by the society's sister organization, the Cancer Action Network, a group of volunteers who generated a barrage of e-mails and telephone calls to Senate offices and held media events and rallies across the country. In cooperation with AARP and ADA, the group also ran online and print ads in 11 states and in several newspapers that circulate on Capitol Hill. Although the association has worked with partners in the past, this was the first time these three groups came together in opposition to a specific bill, according to a spokesperson.
The legislation presents other concerns for the cancer community as well, such as the impact that it would have on community rating, state rules that limit the variation in cost between the highest and lowest premiums to more evenly spread the cost of coverage between younger, healthier people and older, sicker people.
In essence, rating rules are designed to ensure that not only those with low risk can afford insurance but also those with a history of serious illness. This legislation would limit those protections and put in their place a national standard, which health advocates fear could increase the difference between the highest and lowest premiums paid by small companies.
"There are now 10 million people in the United States who are living with cancer, that have had a cancer diagnosis and survived it and are living with it. What does that do to them" Smith asked.
These concerns are not unique to this bill but have been part of a long list of bills that would bring association health plans under federal rules.
Although those proposals have been introduced and passed in the House of Representative every year for the past 8 years, no measure has ever gotten as far in the Senate as this one. S. 1955 not only passed the Health, Education, Labor, and Pensions Committee in March but almost made it to the Senate floor for a vote. That success is due to several new provisions in this legislation that have helped neutralize some of the opposition raised by other AHP bills.
One notable change would eventually allow all private insurers offering small-business insurance to play by the new federal rules, even though AHPs would initially be the only health plans eligible. That is one of several differences that were pivotal in blunting the opposition of insurers' trade groups, such as the Blue Cross/Blue Shield Association and America's Health Insurance Plans.
By having one set of regulations for everyone, the legislation would do away with the potential to segment the market into two pools, one with younger and healthier patients and the other with older and sicker patients, said Alissa Fox, executive policy director for the Blue Cross/Blue Shield Association.
The new bill also contains a standard rating formula that sets some limits on how much plans can raise premiums when someone gets sick, she said.
"In the [previous] AHP bills, there are no rules on rating so that an AHP could raise their rates every month. If someone in a group got sick, they could raise their rates as much and as often as they want," said Fox. Currently, insurance companies are limited to raising rates once or twice a year and usually have to justify the new premium levels to state regulators.
Finally, the legislation keeps regulation of the plans at the state level, albeit based on federal rules.
"We believe that the states are the best place to regulate and to protect consumers and that by transferring authority over to the Department of Labor, you would have essentially no regulation," she said, adding that the labor department doesn't have the resources, infrastructure, or culture for regulating insurers.
There's no argument that the Department of Labor is ill equipped to regulate the insurance industry, said Mila Kofman, a former federal regulator in the agency. However, she worries that the department is still responsible for certifying association health plans under the measure.
"AHPs are deemed certified if they submit an application and the Department of Labor does not respond within 90 days. The department doesn't act on anything within 90 days," said Kofman, who is now an associate research professor in the Health Policy Institute at Georgetown University.
That means there will be little that state insurance commissioners can do to challenge the legitimacy of AHPs, even if they have been certified by default. That creates an environment in which insurance scams can blossom, she said.
The legislation would also put in place a low ceiling on state regulation of health insurers. The measure doesn't give state insurance commissioners the flexibility to interpret the federal rules. Challenging a plan over their reading of the rules would most likely land the state in federal court, Kofman said.
"States would essentially be forced to get rid of all their patient protection in order to harmonize with the federal rules," she said.
Kofman is not swayed by the argument that allowing all insurers to compete under the same rules would remove the potential for dividing the market into healthy and sick, commonly called cherry picking.
"No one is competing to insure sick people," she said.
Back for Another Round
The American Cancer Society shared that concern in launching its opposition campaign.
"We were pleased with the [decision not to hold a vote] in the Senate. But I don't think that the issue goes away, nor do I think that it may be the last time we see it in this Congressional session," said Smith.
Neither do the groups supporting the measure.
"The strength of small business was crucial in moving this debate forward. My colleagues and I felt your wind at our backs when we brought this important debate before the Senate floor for the first time," Enzi said at a recent meeting of the National Federation of Independent Businesses.
"If you keep making your voices heard, we can get this done—and get it done this year."
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