Imagine you have a product that customers love. It’s top quality, affordable and meets or exceeds all state and federal benefit standards. Better yet, your product fills a void in the marketplace that left people vulnerable and unprotected.
Now, half a million people in Washington use your product and your customers gladly buy it year after year. Nevertheless, a government regulator steps in and tries to put you out of business.
Why? That’s a good question.
The product we’re talking about is health insurance coverage for people who work for small businesses. They’re called “association health plans,” or AHPs, and the regulator after them is Insurance Commissioner Mike Kreidler.
Association health plan passed the legislature with strong bipartisan support and were signed into law by Democratic Gov. Lowry in 1995. They were designed to help small employers provide high-quality, affordable health insurance for their employees and families. The law allows associations to band their small member companies together so they have the same purchasing power as big companies.
Today, 20 years later, AHPs are working well. More than a half million people in Washington are insured through AHPs, and small employers are clearly happy with their plans. In fact, many AHPs report that more than 90 percent of the employers renew their coverage.
The success of AHPs is not surprising.
People covered by association health plans have access to top doctor and hospital networks, and they cannot be denied coverage because of a pre-existing condition. In fact, all the benefits mandated by state and federal law, including the Affordable Care Act, are covered.
AHPs also provide a level of support and service not otherwise available to small employers. The ability to offer high quality, affordable health coverage through association health plans helps small employers compete with large employers for the best employees.
AHPs fill a critical void in the marketplace. Historically, 40-45 percent of the employers in association health plans previously couldn’t afford to provide health coverage for their employees. Now they can, thanks to the foresight of Gov. Lowry and the legislature.
In fact, national surveys of health insurance in 2011 and 2012 by AHIP, a national insurance trade association, ranked Washington the second most affordable state in the nation for firms with five or fewer employees and fifth most affordable for firms with 50 or fewer employees.
Interestingly, the Affordable Care Act doesn’t require small employers to provide health insurance for their employees, but thousands of Washington small businesses can – and do – because of association health plans.
If AHPs provide such high-quality, affordable health coverage, why does the Commissioner want to get rid of them? That’s a good question.
In reality, Commissioner Kreidler prefers single payer, government-run health care like the Canadian system. When he moved to undermine AHPs in 2007, the Court ruled he did not have the legal authority to do so. But apparently that was just a bump in the road for him.
If small employers are happy with their association health plans and half a million people have good coverage because of AHPs, why is the Commissioner unhappy?
That’s a good question.
President Obama’s goal in the Affordable Care Act is for nearly every American to have health insurance, whether through the private market or a government program. It is something we can all agree on.
But rather than applaud AHPs for providing coverage, Kreidler is moving against them, stripping people of their coverage. In these uncertain times when the Affordable Care Act is struggling and key parts of it are being challenged in court, that just doesn’t make sense.
Don Brunell is a business analyst, writer and columnist. He can be contacted at theBrunells@msn.com.