Bush pushes association health plans

WASHINGTON —Veterinary leaders commend President Bush's call to enact association health plans (AHP) during his State of the Union speech Feb. 2, citing national policies as a means of insurance savings for small business owners.

The president's gesture comes on the heels of the Small Business Health Fairness Act's introduction to the House of Representatives. H.R. 525 is designed to overhaul the hodgepodge of state laws prohibiting associations from offering nationwide health insurance packages.

It's a deregulatory measure American Veterinary Medical Association (AVMA) officials has championed for years. Due to cumbersome state laws, the association's Group Health and Life Insurance Trust offers no staff health insurance plan, and seven states forbid group coverage for AVMA members.

Riding Bush's political momentum, the passage of H.R. 525 would change the prohibition, says Dr. Michael Chaddock, director of the AVMA Governmental Relations Division in Washington.

"It's a huge deal that this was mentioned in the State of the Union address, and we're hoping the president keeps talking about it," Chaddock says. "He understands that this is one of the ways to help reduce healthcare costs. We have members who cannot write healthcare insurance for their employees. We need this legislation; that's the bottom line."

Facing opposition

To lobby the issue, AVMA joins roughly 160 other associations and professional organizations that are negatively impacted by high insurance costs. The Association Health Plan Coalition meets regularly to take the issue to Capitol Hill, says Dr. Ray Stock, the division's assistant director. So far, the group has done little to sway opposition members, he adds.

Last session, House members twice passed a deregulatory measure identical to H.R. 525 to stimulate the Senate's consideration of its companion bill, but to no avail. The Blue Cross and Blue Shield Association reportedly lobbied the upper house heavily on what Stock says amounts to a "dollar and cents issue."

"I think what it boils down to is that larger insurance companies, including the 'blues', see this as competition," Stock says. "This change would allow a greater number of competing insurance companies to come into various states, and prices will come down as competition rises."

Senators, traditionally more focused on broad state issues, also are concerned that deregulation would strip oversight from individual state insurance commissions and place it with the U.S. Department of Labor. Last session, the bill never left the Senate Health Committee.

Hope ahead

This year, Stock reports roughly a dozen Republican senators plus Robert Byrd, a democrat from West Virginia, are on board with the plan. It's the first time the coalition has lured a democrat to its cause, Stock says.

"I think as each new year comes around and insurance premiums jump up, it becomes more and more difficult to ignore this," he says. "If this passes, it will be a great thing for AVMA."

Overhauling tax code

H.R. 525 isn't the only healthcare issue on AVMA's agenda. The group is lobbying for a tax-code adjustment that would allow small business owners to pay for insurance premiums using pre-FICA (Federal Insurance Contributions Act)

dollars.

Sole proprietors or veterinarians in partnerships currently pay with money that's been taxed, whereas corporate structures can pay for their healthcare insurance premiums with money that has not been taxed.

The Kaiser Family Foundation, which tracks health insurance costs on a regular basis, recently reported that self-employed owners pay an estimated $9,068 in health insurance premiums annually, where corporate structures pay an estimated $1,387 less.

Opposition to the change cites the proposed adjustment as a further drain on Medicare and Social Security. Still, it comes down to fairness, Stock says.

"There are many veterinarians who don't have corporate business structures to their practices," he says. "All we want is equality for those individuals."