Why Does the NAIC Opposes AHPs?
In a nutshell - NAIC does not wish to see a repeat of the early ERISA days fiascos. Key to NAIC concerns is the regulatory oversight structure selected. If AHP legislation continues to only use the original ERISA approach devoid of all the after-the-fact regulations and state-federal coordination that was imposed because of all the early infamous ERISA failures - then no state authority can support the approach.
The National Association of Insurance Commissioners (NAIC) reiterated its long-standing opposition to Senate Bill 545, which would allow for the implementation of association health plans (AHPs). NAIC President and Arkansas Insurance Commissioner Mike Pickens recently signed and submitted on behalf of the full membership of the NAIC letters to key members of Congress, comprehensively stating the organization's opposition to the bill. Pickens voiced strong concern that AHPs will operate beyond the jurisdiction of state regulation to the detriment of consumers.
President Bush has come out in favor of association health plans as a way for small employers to get affordable health coverage.
Specifically, the NAIC contends S. 545 would: (1) permit risk selection thereby creating opportunities for "cherry-picking" among healthier groups; (2) allow inadequate capital standards and solvency requirements both of which are inferior to existing state standards; (3) eliminate proven state consumer protection laws, including those designed to allow consumer appeals of adverse plan decisions and those aimed at preventing and fighting fraud; and (4) allow AHPs to ignore state benefit requirements.