Consumer, Insurance Groups Oppose Bill to Allow Small Businesses to Form Association Health Plans

Consumer and insurance groups are opposing legislation that would allow small businesses and associations to "pool their resources" to form association health plans because they fear the plans would "escape state regulations," CongressDaily reports. The bill, reintroduced Wednesday in the House and Senate, would set "minimum solvency standards," grant states an oversight role and require plans to pay state taxes that would fund small group risk pools. Although those changes were added to the original bill to "respond to past criticism," opponents say the new bill is still "risk[y]." Gail Shearer of the Consumers Union said the bill "would allow these plans to escape state regulations." She added that the plans would prompt the "healthiest workers" to exit other plans, "skewing the risk pool." Scott Serota, president of Blue Cross and Blue Shield Association, said, "We worry that this bill ... will inevitably lead to the formulation of the same kind of organizations and 'entrepreneurs' who in the late 1980s exploited a federal loophole that allowed them to escape state regulation." As a result, "they walked away with millions of dollars, leaving thousands of consumers with unpaid claims and often shattered lives" (CongressDaily, 5/10).