Senate looks at small business insurance

Washington -- A war of words has erupted over a Senate health care bill that doctors' and patients' groups say threatens cancer screenings, childhood vaccinations and diabetes care, while supporters maintain that it would shrink the ranks of the uninsured.

Sen. Michael Enzi (R, Wyo.) says small businesses and trade associations, groups that often cannot find affordable coverage for their employees, will benefit from the "Health Insurance Marketplace Modernization and Affordability Act" because it would allow them to band together to negotiate deals on a national basis. About half the country's uninsured people work for small businesses, and the bill's backers say it would expand the number of insured workers by 900,000 and cut costs by 15% to 30%.

But the American Medical Association, plus organizations ranging from the AARP to the American Academy of Pediatrics as well as patient advocates and state insurance commissioners, have expressed concerns.

Still, it's a topic that President Bush has put at the forefront of his health agenda for this year, and for which Senate Majority Leader Bill Frist, MD (R, Tenn.), has promised to schedule action this month. At press time, it was unclear whether Republicans would have the 60 votes needed to avoid a filibuster if the bill does reach the floor.

The AMA laid out its worries in an April 24 letter to Enzi, focusing on the fact that the health plans created under the bill would be allowed to bypass state benefit mandates.

Another area of concern is that the legislation would open the door to a major market shake-up because participation in its plans is not restricted to small businesses. AMA Executive Vice President and CEO Michael D. Maves, MD, MBA, urged Enzi to limit participation to businesses with a defined number of employees.

Dr. Maves also asked Enzi to include guarantees on cost and coverage, or expand the number of available plans from the two now proposed. Under the bill, insurers could offer a low-cost plan that excludes many services currently mandated by states, provided they also offer a more expensive, "Cadillac" option.

This approach also prompted an outcry from the American Diabetes Assn., which fears that diabetes patients would be in jeopardy of losing coverage now guaranteed in 46 states and the District of Columbia. Other critics agreed, saying the bill could lead to huge cost differentials and limitless deductibles that would force many people to choose the cheaper option and, thereby, be underinsured or essentially uninsured.

Dr. Maves noted, among other points of contention, that the bill allowed insurers to vary rates by plus or minus 25%, depending on health status. It also imposed no limits on premium rate variations for sex, age, geography and participation in wellness programs.

Earlier this session, the AMA expressed support for a competing measure sponsored by Sen. Richard Durbin, (D, Ill.) on grounds that it would advance tax subsidies to small and low-wage employers to help them buy insurance and would offer consumers a choice of plans.

Differences of opinion

It is unclear how the differences between the two sides can be bridged, particularly in an election year when lawmakers are vying for accomplishments. Concern is also growing outside Washington, where governors, attorneys general and insurance commissioners in at least 21 states are voicing strong opinions.

In California, for instance, consumers would lose coverage guarantees for mammograms, colonoscopies and diabetic services, said Bill Lockyer, the state's attorney general. Mike Kreidler, Washington state's insurance commissioner, said consumers would see rates leap two or three times and lose protections against unfair claim handling practices.

Criticisms also are stemming from other health and medical groups.

"[It's] the classic wolf in sheep's clothing," said Daniel E. Smith, national vice president of government relations at the American Cancer Society. In a letter to Enzi, who chairs the Health, Education, Labor and Pensions Committee, Smith warned that the bill would erase state guarantees of access to screenings for breast, colon and prostate cancer, as well as to cancer specialists.

Meanwhile, John Lewy, MD, chair of the AAP Committee on Federal Government Affairs, noted that vaccinations, thyroid checks and testing for phenylketonuria would be under threat. "The bill will only hurt the very families it's trying to help," he said.

But proponents, including the U.S. Chamber of Commerce and the National Federation of Independent Business, say Congress must act to give small businesses more muscle in the insurance market. The House has passed similar legislation eight times.

Steve Northrup, Enzi's health policy director, said the goal is to have essential health care covered, but the legislation had to avoid forcing Small Business Health Plans from complying with the patchwork quilt of state regulations that govern health coverage. The plans still would need to be licensed in every state in which they operated and be approved by the Labor Dept. Thus, consumers would be protected, he noted.

But according to Mila Kofman, an associate research professor at Georgetown University's Health Policy Institute, the Labor Dept. had an unrealistically short 90-day period to object to any given plan. The AMA also has concerns that the bill would prevent patients from challenging insurers in court because it is silent on the subject of external reviews.

People on both sides of the issue, however, are encouraged because the uninsured problem is being debated vigorously. "This is a really great opportunity to get a lot of people from both sides working on this issue," said Jean Hearne, who studied the legislation for the Congressional Research Service.