Date: 2005-07-26
Speaker: SAM JOHNSON (republican)
Chamber: H
State: Texas

Mr. Speaker. I thank the gentleman from Ohio for yielding me this time. As you know. Mr. Speaker. the cost of providing health care for employees has become the number one issue for small businesses around this country. It is especially important to me. because in my home State of Texas. one in four workers are uninsured. Small businesses have it especially tough because there is an inherent problem in a small number of people. You need to be able to pool risk to make insurance work. To make matters worse. there is a lack of competition in the small group health insurance market. allowing a few insurers to charge whatever they want. That is why we need association health plans. These AHPs would allow small businesses to pool together to purchase health insurance. So instead of one individual company shopping for health care insurance. they would bring an entire trade association. for example. the U.S. Chamber of Commerce. to the table with much better bargaining power. However. pooling risk and buying in bulk is not enough. If your association had members all across the United States. you would have to abide by 50 different sets of mandated benefits in order to offer your insurance. Not only is that a headache. but It is more costly. Some of the mandates that have been enacted by State legislatures include infertility treatment and alternative health solutions such as acupuncture. These mandates drive up the cost of premiums. To resolve this. AHPs would allow small businesses to buy insurance under the same terms that large corporations and unions enjoy today. ERISA. a law that governs employer benefits. lets these sort of selfinsured plans use one set of Federal rules. not 50 State rules. Talk about a quick way to lower administrative costs. And lower administrative costs. Mr. Speaker. means lower premiums. up to 30 percent lower by some estimates. and that means affordable health care for employers and their employees alike. So who would not want AHPs to pass? Some critics say AHPs will be an opportunity for flybynight groups that front as insurance companies and then leave employers with unpaid claims. The AHP bill in both the House and the Senate has tough safeguards to protect small businesses and their employees. A bona fide trade organization must have been in existence for 3 years before enactment of the law in order to offer an AHP. And there are Federal solvency standards set up for these health plans. including requirements for a reserve fund and stoploss coverage. This is beyond and above what ERISA requires. Moreover. the Department of Labor would be charged with the oversight of these plans. and the bill gives them the power to pursue criminal penalties against those who commit fraud. The Department of Labor has testified in hearings that they are up to the task and support the legislation. Who else? Groups that have worked so hard to get coverage for their particular treatment mandated by State legislatures do not" want AHPs to be exempt from the 50 different State laws. Let me say it plainly: That is the point of the legislation. One uniform set of benefits lowers administrative costs. If it is good enough for large corporations and unions. it ought to be good enough for small businesses. Mr. Speaker. AHPs are a big step in the right direction for our hardworking families who need health insurance now.