Association Health Plans Have History Of Insolvency And Fraud — So Why Are Republicans Expanding Them?
Association Health Plans Have History Of Insolvency And Fraud — So Why Are Republicans Expanding Them?
Republicans have embraced health association plans as a way to help self-employed people and small businesses maximize affordability of coverage by using their leverage as a large group to negotiate lower premiums.
The Republicans’ alternative health care plan amends the Employee Retirement Income Security Act of 1974 — the federal legislation that governs employer-sponsored self-insured health policies — to allow the federal government to certify and regulate the solvency and adequacy of association plans. Under their legislation, small businesses can come together, by industry or trade, and form health plan through which they can purchase coverage for their employees.
But while the plans goals are laudable, in reality, associations could avoid covering sicker businesses by excluding certain key conditions from coverage and designing policies that only attract healthier applicants. According to the Republican bill, the association would not be required to offer a minimum benefits package and could set “contribution rates based on claims experience of the plan,” crowding employers whose employees actually use their insurance, out of coverage.
The “whole bill is set up to build fly-by-night associations. I run it for a couple of years, I shut it down,” Georgetown professor Karen Pollitz explained in a conversation with the Wonk Room. “I cover these 100 people this year. Next year, I have a different 100 members.” Indeed, between 2001 and 2003, four long-standing self-insured association health care plans became insolvent, “leaving $48 million in medical claims unpaid and 66,000 people and small businesses without insurance.” Health experts argue that association health care plans are governed by “licensing requirements that are often less stringent than those imposed on traditional insurers” and are “at far greater risk of becoming insolvent when claims suddenly or unexpectedly exceed their ability to pay them.”
The Republican legislation establishes new solvency and reserve requirements but it outsources any enforcement of self-insured or national association plans to the federal Department of Labor, “which lacks the tools, resources, and culture to protect businesses against fraud.” One report concluded that the “history of scams involving associations demonstrates that when the federal government has had sole oversight authority, fraud flourished with unscrupulous individuals leaving businesses and their workers without health coverage and with millions of dollars in unpaid medical bills.”
The legislation requires association health care plans to contribute to an ‘Association Health Plan Fund’ that would pay out outstanding claims in cases of insolvency, but leaves the federal government on the hook if the money in the fund runs out. “[I]f the Secretary determines that there is a reasonable expectation that” claims would “would not be satisfied by reason of termination of such coverage. The Secretary shall, to the extent provided in advance in appropriation Acts, pay such amounts so determined to the insurer designated by the Secretary,” the bill states on page 73.
5 Responses to “Association Health Plans Have History Of Insolvency And Fraud — So Why Are Republicans Expanding Them?”
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Reminds me of the auto parts folks who make all these lifetime guarantees then go out of business in about a decade.
November 4th, 2009 at 7:45 pmYou are making claims about the Republican plan that have no basis in reality. Obviously you have read neither plan.
If health care is the problem, insurance is not the cause and government is not the answer.
Of those “50 million,” that lack insurance there were 45,000 who died without health care.
WITH health care, 98,000 died FROM health care because of malpractice.
The question is do we want to trust that largest corporation in the world, the U.S. Government. Do not expect house calls anytime soon.
We have seen how well the government delivers on its promises and its bureaucracies pursue the money without giving us benefits on so many levels.
Imagine another 111 bureacracies that only ultimately must listen to the Secretary of the Treasury – another “service” of which is the IRS.
http://theprogressivecapitalist.blogspot.com/2009/10/affordable-health-care-for-america-act.html
That blog of mine above has several .pdf connections (HR. 3962 and two summaries, a few videos, and page references for new taxes and other mandates).
If you cannot use the link, google “Progressive Capitalist H.R. 3962.”
If you believe the promises of this bill, you have to deal with the lie that it fosters competition with a government option called the “Public Option” and establishes the government as a monopoly making its own rules.
Don’t worry. You’ll run out of “rich” soon enough.
We have at least a $12 trillion economy of which at least $1.8 trillion is spent on health care.
If you read the bill, there are plenty of opportunities to soak the middle class, if you do not mind the 1.6 million made jobless.
REPUBLICAN Affordable Health Care For America Act
MAKING HEALTH Care Affordable For EVERY AmeriCAN
http://thehill.com/images/stories/whitepapers/pdf/ainsfloor_01_xml.pdf
November 4th, 2009 at 11:15 pmOur regressive friends on the right want us to do our own surgeries. LOL! Don’t get sick!
November 5th, 2009 at 1:11 amImmitation is the greatest form of flattery; but seriously- get your own name. DON’T GET SICK!
November 5th, 2009 at 12:22 pmWhy does the GOP continue to offer suggestions to us regular citizens that always support Corporations and existing failed systems?
AARP is supporting Public Option,Doctors are supporting public options, I’m supporting Public Options and I’m not supporting any one from any political party that doesn’t.
Just a poor working stiff, not a Senator or Congressmen
November 5th, 2009 at 2:29 pm