Consumer Groups Oppose Small Business Health Plan Bill

Consumer groups announced their opposition to Senate Bill 1955, which would allow small businesses and trade associations to pool their members into a larger group capable of purchase health coverage at a more competitive rate. Smaller groups have fewer members with which to spread risk - so if one covered individual has an expensive medical condition, the cost gets spread among a smaller number of members, each of whom would have to pay more. With larger groups, the risk gets spread across a larger number of people, who can more easily absorb the cost.

The reason why some consumer groups oppose this bill is because the way it is written, it would circumvent state laws which protect consumers. For example, the American Diabetes Association opposes the bill because it would circumvent state laws requiring plans to cover diabetes supplies and services. The American Cancer Society has similar concerns about coverage of mammograms, which is mandated by state law. These laws protect consumers and ensure that their insurance coverage is meaningful and comprehensive. But proponents of the law feel that coverage without mandated benefits is better than no coverage at all. They hope to reduce the number of small business employees who are currently unable to purchase health insurance at a reasonable price.