Health Savings Accounts For Small Businesses Offer Real Promise, While Association Health Plans Represent A Prescription For Disaster

March 3, 2005

The Blue Cross and Blue Shield Association (BCBSA) welcomes today's House Committee on Small Business hearing exploring the options for providing access to affordable health coverage for one of the key groups that make up the uninsured in America: small business owners, their employees and families.

BCBSA and the 40 Blue Plans recognize the healthcare challenges small businesses face and are working hard to provide these firms and their workers with access to affordable health coverage. The Blues are taking a leadership role in the offering of health savings account (HSA)-compatible insurance products across the country. HSAs empower consumers and hold the potential to reduce health costs. Blue Cross and Blue Shield Plans currently offer HSA products in 38 states and expect to have offerings throughout the country by 2006.

HSAs offer real promise as a flexible and affordable option for small businesses. A recently released report summarizing research conducted over the past five years shows that enacting federal legislation to exempt association health plans (AHPs) from state laws and oversight is likely to make the healthcare affordability problem worse for small businesses. The report, which includes 15 economic, policy and legal studies from sources like the Congressional Budget Office, Mercer Consulting, the California Healthcare Foundation and others, shows that AHPs would not address the problem of uninsured workers, increase premiums for most small employers and their workers, and make it much harder, if not impossible, for small business owners with older, sicker workers to gain access to affordable health coverage.

Because of these serious shortcomings, BCBSA joins more than 1,300 organizations across the country – representing small business associations, local chambers of commerce, farm bureaus, governors, attorneys general and others – who oppose federal AHP legislation.

Rather than advance solutions like AHPs that could hurt, not help, small businesses, their workers and families, the Blues have used their more than seventy-five years of healthcare experience to develop a range of thoughtful policy options, tailored for different populations, that would provide access to affordable, quality care for all Americans. The proposals, which offer the promise of reducing the number of uninsured Americans by up to two-thirds, are detailed in BCBSA's recently released report, "The Uninsured in America."