- The Washington Times - Thursday, June 19, 2003

The House yesterday passed a bill that brings small businesses a step closer to pooling their resources through an association to get cheaper health care coverage for millions of workers.

The Small Business Health Fairness Act passed 262-162 with the support of 36 Democrats.

The bill allows small businesses to band together to purchase health insurance through a national association at group rates. Organizations such as the National Federation of Independent Business, the U.S. Chamber of Commerce and the National Restaurant Association would be able to sell health insurance to their member companies across the nation.

Similar proposals have cleared the House, but a fight is coming in the Senate. The White House-backed bill would waive states’ minimum coverage standards by giving oversight of group health-insurance plans to the federal government.

“This is the right thing to do for small businesses,” said Rep. Sam Johnson, Texas Republican, who co-sponsored the bill. “Health care is the biggest issue that they talk about, and this bipartisan vote is one step closer to solving that problem.”

About 41 million Americans are uninsured, according to figures released by the U.S. Census Bureau in September 2002. About 60 percent of them work for small businesses or depend on someone who does, supporters of the legislation said.

Two years ago, the House passed a similar version that floundered in the Senate. “But there is a different Senate in office now, and with the backing of the White House and Labor Department, it should pass through,” Mr. Johnson added.

However, the narrowly divided Senate has been a burial ground for small-business health plans because of bitter partisan debate. Foes include Sen. Edward M. Kennedy, Massachusetts Democrat and ranking member of the Senate Health, Education, Labor and Pensions Committee.

“It’s a special-interest giveaway that does nothing to deal with the rising number of uninsured in this country,” said Mr. Kennedy’s spokesman, Jim Manley.

President Bush said yesterday he would sign the legislation.

“I believe in associated health care plans for small businesses, to allow small businesses to pool risk across jurisdictional lines so as to reduce the cost of small businesses and their employees,” Mr. Bush said.

Critics argue the lack of state regulations will reduce benefits and allow for “cherry picking,” a practice of insuring the healthiest individuals from a group, presenting the least risk.

“When you eliminate consumer-protection regulations, you do away with the state’s ability to protect consumers against fraud and mismanagement,” said Jack Ericson, executive director for government relations at Blue Cross and Blue Shield Association, which opposes the bill.

The association, which insures about 85 million through its 42 member plans, has proposed tax credits for small businesses with low-income workers, to help ease what has been double-digit growth in health care premiums.

“We understand that this is a growing problem. We just don’t think association health plans are the answer,” Mr. Ericson said.

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