cross-posted from tpm
The Senate Health, Education, Labor and Pensions Committee on Wednesday voted along party lines to approve an association health plan (AHP) bill. President Bush pointed to AHP’s in his state of the union address as one of many reforms to help individuals attain health insurance. But AHP’s expose individuals to another frontier of risk, where their health benefits are paltry, uncertain, and expensive.
The key complaint driving the creation of AHP’s is that state regulation bars insurers from offering affordable health plans. If insurers could offer plans on a national market, bypassing any state regulations, more plans would be offered and more individuals would become insured. Unfortunately, this type of thinking isn’t supported by reality.
Bare-bones plans have been offered for years, and people don’t want them. But more than that, Ezra Klein takes a look at why we have state regulations in the first place:
The reason states mandate that insurers cover certain procedures is so insurers can't price folks who are likely to need those treatments out of the market. Insuring young women, if you didn't need to cover anything related to pregnancy, would be relatively cheap. Pricing the pregnancy package through the roof would be relatively easy. And denying the claims of those who bought the base package and then got pregnant would be trivial -- and would save you a ton of money. So almost all states mandate that you cover maternal care. And this goes across the board, from procedures the old use but the young don't need to packages that target specific lifestyles. If you allow the insurance companies to subdivide the market by treatment needs, what you'll have is bargain-basement pricing for the young and healthy coupled with unbelievable premiums for their less-lucky friends.
But this statement from Committee Chair Mike Enzi (R-WY) on the purpose of AHPs is the most revealing:
Let us put the power in the hands of small employers and family-owned businesses, rather than in the hands of insurance companies or the government. Let the consumers band together to drive the change that we want to see happen
Enzi is completely wrong about where the power in this situation is going. It’s funneled directly to the insurers! They’ll be offering bare-bones plans to these small businesses, who will have no ability to negotiate higher benefits. Why? Because there’s nothing barring them from trying to negotiate plans with insurers now. Insurers simply aren’t interesting in offering an affordable but comprehensive product to small businesses.
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.
The bill has already passed committee. If it passes the Senate, it will only continue to weaken health insurance as we know it. The way to solve our health insurance problems isn't by cutting benefits, it's by fixing our fragmented system that costs twice as much as our more generous international counterparts.