Association Health Plans - Fortune 500 Health Care for Small Business Workers

THE PROBLEM: 45 million Americans are uninsured.

Roughly 45 million Americans are uninsured, and more than half are employed by a small business.  Workers in the smallest businesses that do provide health insurance pay, on average, 17 percent more for health benefits than workers employed by large companies. Alarmingly, this crisis is only growing worse, as health insurance premiums for small businesses increase at double-digit rates while benefits and health plan choices decrease.  A survey by the General Accounting Office found dangerously high levels of market concentration among large insurance companies in the state small group markets.  The five largest insurance companies combined have 75 percent or more of the market in 19 of 34 states supplying information, and more than 90 percent market share in seven of these states.

THE SOLUTION: Association Health Plans (AHPs) will bring Fortune 500-style health benefits to the millions of working families employed by small businesses nationwide at no taxpayer expense.

The Small Business Health Fairness Act of 2005 (S. 406) will reduce the high cost of health benefits for small and medium-sized businesses by establishing new Association Health Plans (AHPs).    This bipartisan legislation will help expand access to health benefits to millions of uninsured workers and provide greater flexibility to small businesses that now have only limited choices and could be forced to drop coverage or reduce benefits due to dramatic premium increases.  Here’s how:

• AHPs can reduce health insurance costs by 15 to 30 percent by allowing small businesses to join together nationwide to obtain the same economies of scale, bargaining clout, and administrative efficiencies now available to employees in large employer and union health plans;
• AHPs provide new coverage options for the self-employed and small business workers that will promote greater competition and choice in health insurance markets; and
• The Small Business Health Fairness Act has tough new solvency standards to protect patients' rights and ensure that benefits are paid.

President Bush strongly supports AHPs and urged the Senate to pass this legislation during his 2004 and 2005 State of the Union Addresses.  The Small Business Health Fairness Act is also supported by over 100 organizations representing over 12 million employers and 80 million American workers.