Cost #1:
PRO: AHPs have already proven that they can provide health insurance coverage to small businesses at affordable rates if regulatory barriers are not too great. The Congressional Budget Office (CBO) has estimated that small businesses obtaining insurance through AHPs should experience premium reductions of 13% on average.
CON: AHPs will not reduce health insurance costs for small employers per a study by Hall, Wicks and Lawlor that states “these proposals …are not likely to produce a significant overall reduction in premiums…”
Cost #2:
PRO: AHPs will help small businesses lower their administrative costs because, by operating under federal law, AHPs can avoid the costs of complying with 50 different sets of state benefit mandates.
CON: Exempting AHPs from state health insurance standards would make coverage less affordable by increasing premiums for the vast majority of small employers and their families.
Coverage:
PRO: AHPs are subject to the Health Insurance Portability and Accountability Act (HIPPA) that makes it illegal to deny coverage to any eligible participant based on the health status of an individual employee.
CON: AHPs will engage in “cherry picking” by excluding older and sicker groups by charging them unlimited rates and raising premiums for those who experience high healthcare costs.
Regulation:
PRO: AHPs will have to register with state authorities and abide by their strict disclosure and reporting procedures.
CON: AHPs would increase risk of fraud and abuse by “severely limiting a states’ ability to stop promoters from selling phony health plans to federally licensed AHPs.”
