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OPA News Release: [02/05/2003]
Contact Name: Sue Hensley
Phone Number: (202) 693-4676

Secretary Elaine L. Chao Testifies on Association Health Plans

Offers Solution for Affordable Quality Health Care for Small Businesses

WASHINGTON—Secretary of Labor Elaine L. Chao today urged the Senate Committee on Small Business and Entrepreneurship to pass the health reforms proposed by President Bush to create Association Health Plans (AHPs) that will provide millions of small business owners and their employees access to quality, affordable health care.

Chao said, “The small business community is the economic backbone of our economy. The President’s health reform proposals offer a comprehensive solution to provide more American families access to quality, affordable health insurance. Association Health Plans will specifically help small businesses and their employees. Congress should act immediately to pass this essential legislation.”

In her testimony, Chao noted that AHPs would achieve savings for small businesses through greater bargaining power, economies of scale, and administrative efficiencies. Sixty percent of employees employed by a small business do not have health insurance for themselves and their families. According to the non-partisan Congressional Budget Office, AHPs will lower health insurance premiums by 13 percent and provide health insurance to as many as two million Americans who are currently uninsured.

Furthermore, Chao stated that federal certification standards and oversight would provide important protections for workers to combat against fraud. These protections would be administered by the U.S. Department of Labor, just as the Department independently regulates self-insured health plans providing benefits to approximately 70 million American workers, retirees and their families under current law. In addition, the Department shares regulatory responsibilities with the states for the approximately 60 million participants in fully insured health plans.

Chao urged the Committee to support the legislation so that more working Americans can enjoy health insurance coverage.

The full text of the testimony will be available on the Internet at www.dol.gov.

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