[Congressional Record Volume 148, Number 12 (Tuesday, February 12, 2002)]
[Extensions of Remarks]
[Pages E127-E128]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  ASSOCIATION HEALTH PLANS ARE NEEDED

                                 ______
                                 

                         HON. WILLIAM M. THOMAS

                             of california

                    in the house of representatives

                       Tuesday, February 12, 2002

  Mr. THOMAS. Mr. Speaker, I rise today to urge that a conference on 
patient protection legislation be called immediately. The House passed 
this bill last year and the delay in its enactment is impacting people 
in my state and beneficiaries in my district. In particular, a recent 
unfortunate event in California only illustrates the need for timely 
action on patients' bill of rights legislation, particularly my 
amendment on association health plans (AHPs).
  For several years, Sunkist, the world-renowned citrus and agriculture 
grower, contracted for a health benefit plan for its growers and 
workers. The SGP Benefit Plan, a multiple employer welfare arrangement, 
was regulated under California insurance law, which had some provisions 
for cash reserves and other protections.
  Late last year, the SGP Benefit Plan collapsed and filed for 
bankruptcy. As a result more than 23,000 participants, including 4,000 
Kern and Tulare county beneficiaries, were left without direct health 
coverage. This interruption of care troubles me, especially since 
timely passage of the House patient protection bill, supported by 
President Bush and bipartisan House Members, could have prevented the 
situation these families are facing today.
  Under the House bill, these multiple employer welfare arrangements 
would be classified as AHPs and be subject to strict solvency 
standards, including requirements that AHPs have an indemnified back-up 
plan to prevent unpaid claims in the event of a plan termination, 
quarterly procedures to demonstrate financial health, and surplus 
reserve requirements that are on par or greater than similar state law.
  Along with requiring higher standards for multiple employer welfare 
arrangements and other similar employer pool arrangements, the added 
benefit of my AHP legislation is that it could increase access to 
health care by reducing burdens and costs employer groups face from 
multiplicitous and divergent state mandates. Since AHPs would help 
small businesses work together to purchase health care for their 
employees and families, according to one study of this legislation, 
AHPs could reduce the number of uninsured Americans by an estimated 8.5 
million people. This is especially timely, since the recent recession 
and terrorist attacks have affected national employment, thus having an 
effect on the health care of Americans who depend on employer-sponsored 
coverage.
  In the 21st District of California that I represent, the unemployment 
rates in Kern and Tulare Counties recently hit 11 percent and 16 
percent, respectively. With the District's dependence on agriculture, 
oil, dairy, and other small business, the potential for AHPs to help

[[Page E128]]

provide access or improve health are to my constituents and the self-
employed is great.
  Sunkist's recent announcement, the rise in the number of uninsured, 
and the fact that patients, physicians, and other providers have waited 
too long for reforms are all compelling reasons why patient protection 
legislation must be enacted soon. Because the House legislation 
includes many common-sense improvements in patient access, coverage, 
and liability, along with the important AHP and medical savings 
accounts provisions, I urge that a conference on this bill be called 
immediately.

                          ____________________