AHPs aren't the answer for state's businesses

e-mail this story discuss this issue in our forums Guest column • George Johnson: AHPs aren't the answer for state's businesses (06/30/05) • James F. Barker: Clemson-ICAR takes shape to help our future (06/29/05) • Eric Graben: Jesus wouldn't post Commandments in public halls (06/28/05) • Sean Patrick O'Rourke and Ron Manuto: Remembering sacrifice: Goodman, Chaney, Schwerner � (06/28/05) • : Sometimes the best vacation is getting close to it all (06/26/05) More details George Johnson is vice president of corporate communications and federal affairs for BlueCross BlueShield of South Carolina, where he has worked since 1978. He earned a bachelor's degree from Furman University and a master's degree from the University of South Carolina.

Legislation to allow AHPs would create unregulated insurance companies exempt from South Carolina laws that are designed to protect consumers, doctors and hospitals in our state. For instance, federal AHPs would eliminate state protections that shield consumers from unlimited rate increases and guarantee an external review for any denied claims.

In the 1980s and 1990s, an epidemic of health insurance fraud swept the country, including South Carolina. Health plans called Multiple Employer Welfare Arrangements (MEWAs) were created to help small businesses afford health insurance. Yet in practice, lack of state protections left many small businesses and their employees vulnerable to these unmanaged and under-funded health plans.

Consumers went without health care when they needed it most, and physicians, hospitals and other health care providers were left without compensation. This was particularly difficult for patients already involved in a course of treatment. In 1983, Congress tried to address its failed policies with federal legislation that returned regulatory oversight of MEWAs to the states.

Looking to the future if the AHP legislation passes, the nonpartisan Congressional Budget Office estimates that 75 percent of small employers and their employees (23 million people) would face rate increases. A recent nationwide study by the Mercer financial consulting firm further indicates that the number of uninsured would increase by one million and health insurance premiums for small employers that continued to purchase state-regulated coverage would increase by 23 percent.

South Carolina has enacted laws to ensure that health insurance plans offered to small business employees and their families are dependable and adequately priced, and that the health plans pay claims in a timely manner. But small employers who join AHPs would rely on the U.S. Department of Labor for oversight. Given its current resources and anticipated workload under AHP legislation, the DOL recently testified that it would be able to review each health plan only once every 300 years.

Besides eliminating consumer protections related to rate increases and denied claims, special exemptions for AHPs also would result in the loss of coverage for specific benefits currently required by state law. South Carolina has enacted laws that require insurance companies to cover certain medical procedures and treatments. Federal AHPs would be exempt from covering these benefits, including mammography screenings, minimum mastectomy stays, cervical cancer screenings, and diabetic supplies and education.

The end result would be sorting the healthiest people into AHP coverage under federal rules and forcing the sickest people into insurance plans under state rules and where costs would be astronomical because the financial risk would not be more evenly shared with a healthy population. This cherry-picking is unacceptable.

Blue Cross and Blue Shield plans across the country are committed to making health care coverage as affordable as possible, and in South Carolina we continue to work to make healthcare affordable for small business through reduced administrative costs and discounted rates negotiated with physicians and hospitals. But Association Health Plans are not the answer for small business in South Carolina. For information, including a list of hundreds of organizations nationwide that oppose this legislation, visit www.protectyourhealthcare.org.