Last week, a filibuster by Senate Democrats successfully blocked S. 1955, the Health Insurance Marketplace Modernization and Affordability Act of 2005. The bill was sponsored by Senate Health, Education, Labor and Pensions Committee Chairman Mike Enzi (R-WY). A vote to end the Democratic filibuster failed by a margin of 55-43; 60 votes are required to end a filibuster. No additional votes on S. 1955 were scheduled as of the date of this article.
S. 1955 would have allowed the formation of Association Health Plans (AHPs), but the bill had major differences from AHP bills that have previously been passed by the House of Representatives. The House had previously passed AHP legislation that authorized the formation of self-insured AHPs. Conversely, the S. 1955 legislation considered this year would have only allowed AHPs that purchased insurance through the commercial market. In addition, the bill would have created new federal standards effectively pre-empting state regulatory authority in the following areas:
- Mandated Benefits: S. 1955 would have created federal guidelines allowing AHPs to offer a “basic option” that would have been exempt from state benefit mandates, as well as an “enhanced option” based on the state employee benefits of one of the five most populous states (TX, FL, CA, NY, IL).
- Rating Rules: S. 1955 would have created federal rating guidelines for the small group market. These new rating rules would have permitted unlimited premium variation for age, gender, geographic location, wellness programs, family composition, and small business size. Rating on industry type would have been the only factor with a specific parameter and would have been capped at a 15 percent variation. Preliminary analysis of the bill calculated that a 25:1 variation could have been allowed; for example, the lowest priced group would have paid as little as $100 per month and the highest priced group would have paid about $2,500 per month.
- Insurance Market Regulation, Oversight and Consumer Protection: S. 1955 would have replaced state laws governing insurance markets with federal rules that would have sought to minimize differences across state lines. States would have been severely limited in their regulatory powers under this proposed bill.
S. 1955 sparked a heated debate across a number of policy issues. It has provoked a negative response from many states and state policy makers because it effectively would have removed the state regulatory enforcement of insurance markets. States would no longer have been able to determine the content of their benefit packages, consumer protections, and market oversight provisions, and would not have been able to determine insurance rating rules.
Concerns over S. 1955 were expressed by a number of states and by both political parties. Thirty-nine Attorneys General signed a letter to Chairman Enzi expressing their concerns over the bill.
Analyses of S. 1955 by both the Congressional Budget Office and the Congressional Research Service are available. Additional information about this bill is available from a briefing entitled "Ideas for Making Health Insurance More Affordable for Small Businesses" sponsored by the Alliance for Health Care Reform.
