 |
| |
|
|
|
|
|
An Association Health Plan for Maine Small Businesses
MEDSA is investigating the options that an Association Health Plan would offer our members. Please give us your feedback.
Senator Snowe Sponsors The Small Business Health Fairness Act
Visit here for more information about this bill’s legislative activity, links to contact Maine's Senators and Congressmen and a sample letter of support for Association Health Plans.
What are Association Health Plans (AHP)?
- Federal AHP legislation would allow small business owners in Maine and across the country to band together through their membership in a bona fide industry association, to purchase health coverage for their families and employees.
-
For example, AHP’s would allow a Maine technology business owner to purchase health benefits through an association like MESDA. The association then purchases and processes health insurance for a large group of small business owners, taking advantage of their greater volume as a group to gain purchasing clout, volume discounts and administrative efficiencies.
Are AHP’s safe for Maine?
-
Yes. In fact, the solvency standards found in AHP legislation require AHP’s to:
- Protect patients' rights and ensure benefits are paid
- Have an indemnified back-up plan in order to prevent unpaid claims in the event of plan termination
- undergo quarterly independent actuarial certification for financial soundness
- Maintain surplus reserves of $2 million in addition to normal claims reserves
How will AHP’s help Maine’s small business?
-
AHP’s could save an estimated 15-25 percent compared with the cost of purchasing coverage directly from an insurance company.
-
AHP legislation would minimize the disadvantage that Maine’s small businesses face in attracting and retaining quality employees. More than 90% of Maine’s technology companies have fewer than 15 employees, large companies are currently able to offer health benefit packages that are more generous and affordable than those offered by small businesses. AHP’s would establish a balance.
Save Money
- Studies show that AHP’s would save the typical small-business owner between 15 percent and 30 percent on health insurance.
Reach the Uninsured
- Studies show that AHP’s would help as many as 8 million currently uninsured Americans finally receive the coverage they deserve.
Available to All
- Association health plans must abide by all HIPAA rules and therefore cannot exclude high-risk individuals or groups.
Small Business at a Disadvantage
- Roughly 41 million Americans are uninsured, and over 60 percent reside with a family member employed by a small business.
- Workers in the smallest businesses that do provide health insurance pay an average 17 percent more for health benefits than workers employed by large companies.
- The nation’s smallest firms pay higher premiums for single coverage than any other firm size group - about $30 more per month than other firms.
Where has the Free Market Gone
- It is estimated that in 1990, there were more than 1,000 AHP’s nationally. Today, Maine has none.
Freedom of Choice
- 83 percent of companies with more than 5,000 employees offer a choice of more than one health plan. Only 10 percent of firms with fewer than 50 workers offer a choice of plans.
Struggling to Offer Coverage
- Only 55 percent of firms with 3 to 9 workers offered health benefits in 2002 – down from 58 percent in 2001.
- Employer-sponsored health coverage declined in 2002 Census Bureau statistics because businesses with less than 25 workers were forced to drop coverage due to rising health care costs.
The Cost to Families
- In 2001, the average annual family health care policy cost $6,902 per small business employee, per year.
The DOL Can Handle AHP’s
- The Department of Labor currently administers ERISA protections covering approximately 2.5 million private, job-based health plans and 131 million workers, retirees and their families. Of these, 275,000 plans covering 67 million individuals are self-insured, and therefore subject exclusively to DOL oversight.
Crippling State Regulations & Mandates
- According to PriceWaterhouseCoopers, state mandates on health insurance increased 25-fold from 1970-1996.
- Milliman & Robertson found that the most common state mandates on health insurance add 30 percent to the cost of insurance.
- A 2002 PriceWaterhouseCoopers study found that mandates, government regulations, and the impact of litigation accounted for 22 percent of the increase in health care spending in 2001.
Beyond Inflation
- Health benefit costs have been rising faster than inflation for the past four years. Among small employers, a typical deductible jumped from $250 to $500 for an individual.
Where can I find out more about AHP’s
|
| | | |
|
