The House passed a controversial bill that would allow small businesses to band together into so-called association health plans. The legislation, endorsed by President Bush, now goes to the Senate. Supporters, led by the National Federation of Independent Business, argue that association health plans would enable small businesses to bargain as a group for better insurance rates or cut administration costs by self-insuring. Opponents, including the Blue Cross and Blue Shield Association and the Health Insurance Association of America, say the plans will create a two-tiered insurance market by skimming off the healthiest groups and leaving the sickest and costliest workers behind, thus driving up rates in the traditional small-employer insurance market. Association health plans are exempt from most state benefit mandates and rating restrictions to which traditional insurers must adhere. -- by Laura B. Benko
Association health plan bill passes House
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