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Covering More of the Uninsured |
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Written On: March 2006 |
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Written By: by Charles Henry Thomas |
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Remember the famed Harry and Louise TV ads extolling the ills of "government run" health care? They cleverly dashed Hillary Clinton's grand scheme to force all employers to provide a uniform health care plan for their workers and families.
Clinton's prototype was hatched right here in Washington and eventually led to the advent of association health plans.
In 1993, our newly-elected governor, Mike Lowry, pushed his fellow Democrats who controlled the Legislature to overhaul health care. Interestingly, the labor unions didn't like Lowry's approach and had the Legislature carve them out. It seemed their health care benefits were better than those authorized by the Legislature.
Unions Opted Out
That was a minor fender bender compared to the wreck awaiting Lowry in his old stomping ground—Congress.
Washington's landmark law needed an exemption from the Employee Retirement Income Security Act of 1974 to implement the so-called "employer mandate." ERISA insures that all pension and health plans are consistent regardless of where a worker may be employed. Since our state's new standard health insurance plan was not consistent with other states, the 1993 reforms hit a wall.
Frustrated by Congress's thwarting of the 1993 reforms, Lowry pulled together a group to find ways to help employers cover more workers. Included in that group was AWB President Don Brunell, who had been involved in health care since 1986.
"We knew that a government-run, single-payer model drew our opposition and mandatory employer-provided health insurance was a dog that wouldn't hunt, so we convinced Lowry to try a renewed market-based approach," Brunell said. "We developed association plans so organizations like AWB could aggregate small businesses to drive large purchaser discounts."
AWB then began its HealthChoice program, one of the key membership benefits.
In the beginning, HealthChoice was an "employee-based" program where a small business (two to 50 workers) could offer their workers and families a dozen choices.
"Our goal was to allow them to chose the plan which best fit them and their families," Debra Brown, AWB's senior vice president of member services said. Brown coordinates member services, which include health insurance and workers' comp retrospective rating.
In the original program, there were four insurers offering three plans—a high- and low-cost point of service and an HMO. The program produced immediate results. Nearly half of the small businesses joining HealthChoice had not offered health insurance before and the size of companies quickly dropped from 13 to nine employees.
"We kept our promise to cover more of the uninsured," Brunell added.
In the late 1990s, many carriers withdrew from Washington. That forced AWB to switch to an "employer-choice" framework similar to our competitors, and Premera became the HealthChoice insurer.
Today, HealthChoice has five insurance plans with deductibles ranging from $250 to $1,500. Recently, AWB added three Health Savings Accounts to the mix with deductibles ranging from $1,250 to $2,500.
AWB Insurance Covers 16,000 People
HealthChoice now serves 2,000 employers covering nearly 16,000 workers and their dependents. The average size company on the plan is five workers and 45 percent of the businesses are offering health insurance for the first time.
Recently, more insurers started selling association plans. Along with Premera, Regence, Aetna and Pacificare compete with HealthChoice.
"Free market competition is what we want," Brunell said. "People need choices of insurers and products. We believe that consumers, not government, should dictate the marketplace."
Congress is also considering national association health plans which would be free of most state-mandated coverage. While those plans present problems in heavily regulated states like Washington, they offer a new opportunity to cover more of the uninsured.
AWB pushed similar plans in Washington, which would only include a list of essential benefits, but would allow insurers to incorporate optional coverage for others. For example, mammography would be mandated in every plan, while obstetrics would be added for women of child-bearing years.
In the end, allowing associations like AWB to tailor health insurance and people to make purchasing decisions is what will drive health care costs down, Brunell concluded. Association plans like HealthChoice are working and allow employers to offer affordable health care coverage for their workers and families.
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