WITH AMERICA GRAPPLING WITH RISING health-care costs, Association Health Plan (AHP) legislation in the House and Senate would enable the nation's small businesses to offer better and more affordable health-care options for their employees.

The U.S. Census Bureau estimates that there are roughly 45 million uninsured individuals today, up from 41 million four years ago and 43.6 million in the past two years. More than 24 million of these workers are employed by small businesses.

AHPs would provide a remedy by allowing small businesses to band together through associations to purchase quality health care at a lower cost.

Championed in the Senate by Olympia Snowe (R-Maine), Jim Talent (R-Mo.), Robert Byrd (D-W.Va.), and Christopher “Kit” Bond (R-Mo.) and in the House by John Boehner (R-Ohio), Sam Johnson (R-Texas), Nydia Velazquez (D-N.Y.), and Albert Wynn (D-Md.), the “Small Business Health Fairness Act” would help small businesses access greater health insurance options and lower premiums.

Many of the NAHB's 220,000 member firms consist of small-business employers who have experienced dramatic increases in health insurance premium costs in recent years, making it difficult to provide quality health insurance at an affordable price.

According to the Kaiser Family Foundation, a nonprofit research firm in Menlo Park, Calif., health insurance premiums have soared since 2000, growing 59 percent. As a result, the amount of premium employees pay for family coverage has increased nearly 64 percent over the past four years, from $1,619 to $2,661. By contrast, average pay has risen just 12.3 percent during this period.

President Bush has indicated that he intends to make passage of AHP legislation a key component of his domestic policy agenda for 2005. During his State of the Union address on Feb. 2, Bush urged lawmakers to create “AHPs for small businesses and their employees.”

Studies by the Small Business Administration, the Government Accountability Office and the Congressional Budget Office (CBO) have all found that AHPs could help small businesses lower administrative costs by 13 percent to 30 percent per year. And the CBO estimates that up to 2 million workers and their families who are currently uninsured would be able to obtain coverage if AHPs were available.

AHPs represent true market reform designed to reduce health-care costs by giving small businesses an alternative to purchasing coverage from a large carrier. They would put small businesses on equal footing with large employers and unions when it comes to negotiating lower insurance costs. In short, AHPs will bring Fortune 500 health benefits to small businesses, their employees, and working families.

And that is why the NAHB is taking a leading role to move this legislation through Congress. The NAHB serves on the Steering Committee of the Coalition Supporting Access & Choice Through AHPs, an organization that includes more than 160 trade associations representing more than 12 million employers and 80 million employees.

The NAHB is also working directly with bipartisan leaders in both chambers of Congress to enact AHP legislation into law. The House approved the bill last year, but it stalled in the Senate. Senate Majority Leader Bill Frist (R-Tenn.) recently told the NAHB that he will be urging the full Senate to “consider this critical legislation during the 109th Congress.”

Dave Wilson
President, NAHB, Washington, D.C.