Health News

Small-Business Health Insurance Flops

May 12, 2006 -- The Senate turned away a bill Thursday that would have let small businesses join together to buy lower-cost medical insurance for workers.

The bill garnered 55 votes on a procedural vote that would have required 60 supporters to pass.

Nearly half the nation's 46 million uninsured people own or work in small businesses. Owners have long complained that existing laws put them at a disadvantage when trying to negotiate for better coverage rates the way big companies do.

The Republican-backed measure would have let small firms band together across state lines for the purposes of purchasing coverage.

The Congressional Budget Office estimated that policy could extend insurance to about 900,000 Americans who now lack it.

Opposing Voices

But Democrats strongly opposed the bill, complaining that its gains came at the cost of gutting state laws that force insurers to cover a variety of routine medical services. Common examples include coverage for cancercancer screening, mental healthmental health treatment, and contraceptives.

Hundreds of health care groups, including the American DiabetesDiabetes Association, American Heart Association, and AARP, also opposed the bill.

The American Cancer Society released a statement claiming the bill "would threaten access to mammograms and other vital cancer screenings and treatments."

Democratic opponents also say the bill circumvented state regulations that prevent insurers from covering only businesses with younger and healthier workers. The process, known as "cherry picking," could raise insurance costs for older or sicker workers, opponents argued.

"It does little to address the underlying causes of health care inflation," said Sen. Christopher Dodd, D-Conn.

Republican Sen. Mike Enzi of Wyoming, the bill's chief sponsor, accused Democrats of blocking a modest effort to make insurance more affordable. Enzi argued that insurance without popular guaranteed services was better than none at all.

"They argued that we should deny the people in small business from having anything until we can get them everything," said Enzi, who leads the Senate Health, Education, Labor, and Pensions (HELP) Committee.

Compromise Attempt

Sen. Olympia Snowe of Maine, a Republican moderate, attempted a compromise offer that protected coverage guarantees as long as they were already available in at least 26 states.

But the offer failed to win over Democrats, who were frustrated by Republican refusals to allow other amendments on issues including embryonic stem cell research and extending the sign-up deadline for MedicareMedicare's prescription drug benefit.

Senate Majority Leader Bill Frist attacked Democrats for blocking a final vote on the measure. "With 46 million uninsured Americans, our nation is confronting a monumental health insurance crisis," he said.

Senate Democratic Leader Harry Reid of Nevada criticized Frist for refusing to allow debate on Democrats' favored issues. Asked if the vote was the last chance for Congress to make progress this year on the growing number of uninsured, Reid said, "I'm sorry to say, it is."