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March 20, 2006



As usual, Ezra -- in his quest to make what is, I suppose, his point -- gets his facts wrong, and just sounds silly.

States don't (as a rule) mandate maternity coverage (although most do require cover for complications). So his whole argument is based on a false premise.

Time to burn that particular straw man, Ezra.

And Kate, I'd be very interested to see your documentation that large groups of people have been offered "bare-bones coverage" and taken a pass.

The reality is that -- for quite some time -- there have been darned few such policies available; and once they hit the market, they tend to be *very* attractive (cf: the explosion of the "new" mini-med plans).

Have a great week!

Trapier K. Michael

Re: "But why trust history? Enzi wants consumers to band together and force doctors/ hospitals/ insurers/ employers to provide them with cheaper health care. Because they surely haven’t had enough time to do so the last forty years."

Ugh. I don't even have the breath to comment. I can only say that as a lifelong patient yourself, you are a frightful spokewoman for health care consumers' rights. Frightful.


Trap, if I read your comment right... it was unnecessary.

Regardless, on AHPs... I think the insurance companies are making a legitimate argument here... right now large companies are able to self-insure under ERISA and therefore do not have to comply with state regulations and, while people can and do complain that ERISA creates a regulatory vacuum, there is no reason not to allow AHPs to follow exactly the same rules and regulations as self-insured employer plans under ERISA.



Sure there is. ERISA plan benefits are created by companies that want to keep their employees. They have (or hire) expertise in the healthcare market, and the ability to make informed decisions.

Small employers in an AHP plan don't have expertise, can't afford to hire it, and most importantly, are subject to adverse selection.


Dan, I think it depends on who sets up the AHP plan. While small businesses can not hire healthcare consultants, on the other hand it is not clear who would sponsor the AHPs, for example, it would make a lot of sense for freelancer guilds, local chambers of commerce, and small business associations to sponsor AHPs. In fact it makes more sense for them to do so than for insurance companies for precisely the reasons we are disucssing: the affiliative organizations provide agency benefits becuase they would be able to employ healthcare consultatns and the like; the market that a non-insurance company sponsored AHP addresses is more diverse than the market that an insurance company sponsored one would address since the insurance company would, presumably, target discrete collections of employers, rather than the organization offering health insurance to its members. Of course, as you point out, this won't obviate the adverse selection issue, but it will go further towards making health insurance accessible to small businesses. A final point: AHPs, depending on structure, can reduce the fragmentation of health insurance purchasing, thus reducing the administrative costs of the plans and providing a cushion for some adverse selection before premiums would have to increase.

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