April, 2005
Washington Watch
Inspection News and Views from the American Society of Home Inspectors

Congress Considers: Will collective bargaining give small business and associations some muscle negotiating with health insurers?


(Washington, D.C.) — With the vocal backing of President Bush and two fresh new bills in the 109th Congress, the momentum for Association Health Plan (AHP) legislation is growing inside the Washington Beltway.

And with the increased size of the Republican majority in the U.S. Senate, the chances for passage of AHP legislation during this Congress have increased considerably. AHP legislation was a popular topic at the recent ASHI conference in Austin. Members expressed nearly unanimous support for a bill that can help them meet the challenges of skyrocketing health care costs.

Double-digit annual increases in premiums and more pose a terrible challenge to small businesses struggling to provide affordable health care coverage in their companies. Unchecked cost increases are stretching business owners to their limits, forcing them to make hard choices about employer-provided health care. Owners are finding themselves in untenable, lonely situations, confronting insurers one-on-one with little bargaining power.

The AHP legislation would give small business owners newfound strength to negotiate better policies and rates. It would amend ERISA law to allow associations such as ASHI to use the collective bargaining power of their memberships to negotiate more favorable health insurance packages, and to make the plans available to their members nationwide.

President Bush made AHPs a cornerstone of his small business platform during the 2004 campaign. As recently as February 28, 2005, he reiterated his strong support for AHPs in a speech to the National Governors Association, which is known to oppose AHPs. Bush held firm to his support and argued against parochial interests that seek to maintain a state-level stranglehold on health insurance law.

In the U.S. House of Representatives, the new AHP bill is HR525. At press time, the bill had 97 cosponsors, approaching one-quarter of the entire House. The House already has passed AHP legislation in previous Congresses and is expected to do so again easily.

The choke point in the legislative process has been the Senate, where opponents have been able to use the threat of filibuster to keep the House-passed bills off the Senate floor. However, the November elections increased the Republican seat lead in the Senate to 55-45. While AHP legislation enjoys support from both pro-small business Republicans and Democrats alike, the AHP legislation draws its strongest support from the GOP. If the Republicans can hold all of their Senators and attract at least five Democrats to join them, then it is possible the AHP bill can overcome a filibuster threat. President Bush has been stumping hard for AHPs in states that voted for him and have Democratic Senators.

The new bill in the Senate is S406. At press time, there were 16 cosponsors. With the strong support of the president, the continued certainty that the bill can pass the House, and the better odds in the Senate, there is a feeling on Capitol Hill that AHPs can be completed in the 109th Congress. This is precisely the same political interplay that brought passage of the Class Action Reform bill in the opening weeks of the session.

Pro-AHP enthusiasm is tempered by the fact that substantial opposition remains, primarily in the insurance industry and in state governments that view AHPs as an intrusion on state insurance authority. AHP opponents are expected to muster a maximum effort to stop the legislation, and the focal point for opposition will remain the Senate.

ASHI strongly supports AHPs and will actively seek passage. ASHI is a member of the leading coalition pushing for enactment. ASHI previously has issued a Legislative Alert to its membership to contact their elected representatives on this matter and will do so again in 2005, prior to a critical vote. Should either HR525 or S406 become law, ASHI would actively seek to offer an ASHI-developed AHP program to its members.

It will remain a difficult fight to enact AHPs and the outcome is anything but certain, but ASHI remains committed in its support so that it can assist its membership in addressing this very important concern. ASHI urges its membership to ask their elected representatives to cosponsor the AHP bills and push for floor consideration at an early date.