Ideas for Making Health Insurance More Affordable for Small Businesses

Congress has actively considered whether and how to reorganize the health insurance market for small businesses. In Spring 2006, the Senate debated a legislative proposal, offered by Senators Michael Enzi and Benjamin Nelson, which centers on Small Business Health Plans (SBHPs). SBHPs are a new category of group health plans sponsored by bona-fide professional and other associations. The House has debated and approved related legislation on association health plans.

Proponents argue that SBHPs would result in more consumer choice, lower costs and reduced regulatory burdens, while skeptics say that SBHPs would remove benefit mandates and rating structures put in place in many states. Skeptics also say SBHPs could segment the insurance market and increase premiums for currently insured employees. There are differences of opinion over whether SBHPs would reduce the number of uninsured Americans.

Competing legislation offered by Senators Richard Durbin and Blanche Lincoln would set up a nationwide voluntary purchasing program for businesses with 100 or fewer workers modeled on the Federal Employees Health Benefit Program. This approach would leave regulation of benefits to the states. Proponents suggest that this approach will allow employers to reap the benefits of group purchasing power and streamlined administrative costs; skeptics state that this type of arrangement has been tried by several states without any appreciable reduction in premium costs for small employers.

To help our audience learn more about the small business insurance market and these proposals, the Alliance for Health Reform sponsored an April 24, 2006 briefing. Panelists were: Jean Hearne, a specialist in social legislation with the Congressional Research Service; Joseph Rossmann, vice president of fringe benefits for Associated Builders and Contractors, Inc.; and Mila Kofman, assistant research professor at Georgetown University’s Health Policy Institute. Krista Donohue, legislative assistant for Senator Durbin, and Steve Northrup, health policy director for Senator Enzi, joined the panel for the question and answer session. Ed Howard of the Alliance moderated the discussion.

Transcript

Full Transcript (Adobe Acrobat PDF)

Speaker Presentations

Jean Hearne Presentation (Adobe Acrobat PDF)
M. Kofman Presentation (Adobe Acrobat PDF)