February 22, 2005
U.S. Representative Dennis Hastert
Speaker of the House
235 Cannon House Office Building
Washington, DC 20515
Dear Speaker Hastert:
We are writing to express our opposition to legislation that would exempt association
health plans (AHPs) from state regulation and oversight (H.R. 525).
Rising health care costs and the increasing numbers of Americans without health
insurance is a major national problem that requires action and attention. However, AHPs are not
a solution to the access and affordability problems facing small firms and would, in fact, make the
current problem even worse, resulting in higher premiums and less secure coverage for the vast
majority of small businesses. AHPs would also take away critically important consumer
protections that millions of Americans rely on today.
Because of the serious concerns raised about AHPs, more than 1,300 national, state, and
local groups oppose this legislation. Those opposed to this legislation include state officials
(including the nation’s governors, 41 state attorneys general, and the nation’s insurance
commissioners), provider and physician organizations, consumer groups, small business
associations and state and local chambers of commerce, labor organizations, civil rights groups,
and local farm bureaus. While our organizations may have varied interests and concerns, we are
united in our belief that AHPs will hurt, not help, small businesses, workers, and their families.
Small employers struggling with higher health care costs and premiums would get no
relief from AHPs. In fact, the U.S. Congressional Budget Office (CBO) and other credible, nonpartisan studies have found that the vast majority of small employers would actually see their
premiums increase under AHP legislation. The CBO found that AHP legislation would trigger
premium increases for 75 percent of small employers – representing over 20 million workers and
dependents.
While often touted as a way to expand access to coverage, all of the evidence suggests
that AHPs would not be effective at reducing the number of Americans without health insurance
coverage. All serious studies (by such organizations as CBO, the Urban Institute, and Mercer
consulting) have concluded that AHPs would have a negligible impact on the uninsured or
actually increase the ranks of the uninsured at a time when over 45 million Americans lack any
health insurance coverage. Clearly, everyone can agree that Congress should not support
proposals that would expand the number of Americans without health insurance.
We are also deeply concerned that AHPs would unravel states’ small employer health
reforms that have helped make health insurance coverage more stable and affordable –
particularly for individuals and groups with high health care costs. AHPs’ exemption from state
laws will allow them unfettered ability to increase premiums for small businesses as much and as
often as they want when an employee gets sick. This will place workers with significant health
care needs with the prospect of spiraling premiums and at serious risk of becoming uninsured.
The CBO found that up to 100,000 of the most vulnerable workers would actually lose their
coverage under AHPs. Clearly we can all agree that any “solution” that fails to protect and insure
society’s most vulnerable citizens – those that actually require substantial medical care and
attention – is simply unacceptable.
AHPs would also be exempt from the existing state consumer protections that millions of
Americans rely on today, including the right to appeal to an independent panel when an insurer
denies coverage for care. States also ensure that patients have direct access to specialty care,
emergency care, and clinical trials for patients with life-threatening illnesses. AHPs will take
away these critical protections, compromising workers’ and consumers’ access to quality care.
AHP legislation would also greatly undermine oversight over insurers, exposing
consumers to unpaid medical bills in the event of insolvency or fraud. While states identify and
take action against insurance scams, AHPs would effectively eliminate this critical oversight
mechanism. All of the resources and tools state officials take to prevent and detect fraud would
be eliminated for AHPs, placing consumers at great risk.
For all of these reasons, we urge you to oppose AHP legislation and instead focus on real
solutions aimed at helping small businesses and expanding access to coverage.
Sincerely,
American Academy of Child & Adolescent Psychiatry
American Academy of Pediatrics
American Association for Geriatric Psychiatry
American Association for Marriage and Family Therapy
National Association of School Psychology
American College of Nurse-Midwives
American Counseling Association
American Diabetes Association
American Federation of Labor and Congress of Industrial Organizations
American Federation of State, County and Municipal Employees
American Federation of Teachers
American Managed Behavioral Healthcare Association
American Nurses Association
American Psychiatric Nurses Association
American Psychological Association
AIDS Legal Council of Chicago
Association of Health Insurance Advisors
Bazelon Center for Mental Health Law
Blue Cross Blue Shield Association
Citizen Action – Illinois
Citizen Action – New York
Clinical Social Work Federation
Coalition Against Insurance Fraud
Communications Workers of America
Delta Dental Plans
Families USA
International Brotherhood of Electrical Workers
National Association for Children’s Behavioral Health
National Association of Social Workers
National Association of Social Workers – Rhode Island Chapter
National Association of Insurance and Financial Advisors
National Education Association
National Partnership for Women & Families
Planned Parenthood Federation of America
Project Inform – San Francisco
San Francisco AIDS Foundation
Service Employees International Union
United Auto Workers
USAction