The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“SMALL BUSINESS HEALTH FAIRNESS ACT OF 2003” mentioning the U.S. Dept of Labor was published in the Extensions of Remarks section on pages E1382-E1383 on June 27, 2003.
The publication is reproduced in full below:
SMALL BUSINESS HEALTH FAIRNESS ACT OF 2003
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speech of
HON. DENNIS MOORE
of kansas
in the house of representatives
Thursday, June 19, 2003
Mr. MOORE. Mr. Speaker, I rise in opposition to H.R. 660. It is being promoted by some in Congress as the silver bullet that will help small businesses get health insurance, but I believe that this legislation puts consumers at risk without helping small business owners get health insurance.
Many of my concerns about AHPs mirror those of Sandy Praeger, the Kansas Insurance Commissioner. I will quote extensively from her remarks about AHPs made before the Senate Small Business and Entrepreneurship Committee on February 5, 2003.
AHPs will not reduce the cost of health insurance for small businesses. In fact, the Congressional Budget Office (CBO) estimates that H.R. 660 would actually drive up the cost of coverage for 20 million individuals--80 percent of small employers and their families who are now covered under employer-based health insurance plans. The results of this legislation could actually make coverage less affordable for the vast majority of small business workers who now have coverage. A recent study released by National Small Business United
(NSBU) found that AHPs would result in more than 1 million more uninsured and cause premiums to skyrocket for the sickest workers.
Additionally, H.R. 660 will hurt those who most need health coverage, and those who employ them. H.R. 660 could actually hurt those who most need health coverage by allowing AHPs to ``cherry pick'' only the healthiest, cheapest-to-insure individuals to participate in their plans. Most States prohibit this kind of health insurance discrimination, but H.R. 660 would preempt these anti-discrimination measures in most States, allowing AHPs to discriminate against those who most need coverage. Commissioner Praeger's remarks illustrate how H.R. 660 would undermine State reforms in this regard and leave sicker and higher risk employees out in the cold.
In order to keep costs low, AHPs would have an incentive to target the people who are the least costly to insure--healthy, young people who rarely access health services. By giving AHPs the power to charge higher premiums for less healthy groups and the discretion to offer narrower benefits, these bills will allow AHPs to deter less healthy groups from enrolling. Small businesses that employ older, disabled or chronically ill individuals would be forced to pay more out-of-pocket or left behind altogether. As noted above, 80 percent of small employers will be left out and will likely see their premiums increase as the State-regulated health insurance market loses its healthy individuals to AHPs, leaving sicker and older individuals in the State market.
State consumer protections, such as external appeals of disputed claims, would be ignored as well as other guaranteed benefits such as maternity care, mammograms, mental health treatment, or diabetes. For many years, I have supported efforts to enact a strong patients' bill of rights that would extend consumer protections to all Americans. This legislation, however, would expose millions of workers--in both small and large businesses--who now enjoy the advantages of State consumer protections into plans that are completely exempt from those protections.
Fundamentally, AHPs would completely destroy the State insurance market. As Commissioner Praeger stated:
The AHP legislation in Congress would undermine state reforms and once again fragment the market. Each association would create its own risk pool that, due to the benefits provided, types of business in the association, or area serviced, could have significantly lower risk than the general market. While the bill does make some effort to reduce ``cherry picking'' the NAIC believes the provisions would be inadequate.
Commissioner Praeger goes on to say:
This self-selection is extremely disruptive to the marketplace and will create a very unstable situation in an already fragile small group market, likely reducing the number of insurers willing to offer coverage in the general market. Insurance is of little use unless the costs of caring for the relatively few can be distributed among the many who are healthy.
AHPs would exempt health insurers from State rules that are needed to effectively govern health insurance companies. AHPs would also be exempt from State solvency laws and oversight and subject to inadequate standards. The American Academy of Actuaries has said that the solvency standards for AHPs contained in H.R. 660 are inadequate, and Commissioner Praeger's testimony underscores these concerns. Her testimony states that the solvency standards under the bill are
``woefully inadequate'' and goes on to predict ``If a nationwide AHP were offered to a large association, a capital surplus of only $2 million would result in disaster.'' Supporters of H.R. 660 claim that the Department of Labor has sufficient resources to oversee the new plans and prevent insolvencies and fraud. Commissioner Praeger believes that this is not the case. She notes that ``The Department of Labor has neither the resources nor the expertise to regulate insurance products.''
More than 500 organizations--including many of the major consumer and health care provider organizations--have voice their opposition to this legislation. The legislation is also strongly opposed by the Nation's Republican and Democratic governors, attorneys general and insurance commissioners. Additionally, many in the small business community oppose H.R. 660, including the National Small Business United (NSBU), which has voiced its opposition to this legislation because it would hurt, not help, many small employers. They cite a recent study by Mercer found that AHPs would result in more than 1 million more uninsured and cause premiums to skyrocket for the sickest workers.
I do understand that small employers are clamoring for relief from the high cost of health care, and I support efforts to improve individuals' and small businesses' ability to obtain quality health insurance. I have introduced H.R. 1937, the Small Business Health Insurance Availability Act. This bill would do several things to help uninsured Americans who work for small businesses get adequate health care. My legislation would establish a tax credit toward the purchase of health insurance for all small employers who choose to offer it. The credit will reimburse 20 percent of health insurance costs, up to $400 per year for individuals and $1000 for family coverage. Businesses can get an additional 10 percent tax credit (up to 30 percent total) if they join in a Health Benefit Purchasing Coalition, which provides small employers a way to pool resources, negotiate collectively with insurers, and administer health plans for small employer groups. In order to foster innovation on the State level, the bill creates State grant programs for initiatives that expand health insurance to the uninsured through market innovations.
I believe that we must help uninsured Americans to obtain health insurance while not putting individual insurance markets or consumers at risk. My legislation, in contrast to the very controversial AHP proposals, could be enacted into law immediately without disrupting health insurance markets or regulatory structures. It would also preserve the rights and protections of consumers in States and ensure that the business of health insurance remain regulated on the State level. It would also give small business owners, like their big business competitors, the opportunity to band together and bargain for better insurance rates and terms.
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