Legislation would end Alabama Health Insurance Plan

An Alabama law that guarantees health insurance coverage for some people without regard to their health status is on the fast track to obsolescence in the Legislature.

Sponsors of identical House and Senate bills that would end the Alabama Health Insurance Plan (AHIP) say the program no longer will be needed because the Affordable Care Act (ACA) requires insurers to offer coverage regardless of a person’s health history.

HB 66, sponsored by Rep. Steve Clouse, R-Ozark, passed in the House last month and cleared a Senate committee Wednesday. The bill now awaits Senate approval. Meanwhile, a House committee Wednesday approved SB 123, sponsored by Sen. Slade Blackwell, R-Mountain Brook, putting the bill in line for a House floor vote.

The bills would reactivate AHIP if federal law ever again requires Alabama to offer so-called “guaranteed-issue” coverage. The measures would transfer any unobligated plan funds to the General Fund. They also could eliminate the need for the AHIP assessment on insurers, which raised $10.6 million last year, according to the Legislative Fiscal Office.

Before the ACA, insurers often refused to cover applicants with pre-existing conditions like cancer. Alabama created AHIP as a high-risk pool to cover certain residents who were turned down by other insurers after Congress passed the Health Insurance Portability and Accountability Act (HIPAA).

State Insurance Department figures show that AHIP enrollment has dropped significantly since the ACA took effect, Clouse said. AHIP’s highest enrollment was 1,800 people, but the most recent count of the plan’s participants was 640, he said.

By M.J. Ellington, health policy analyst. Posted Feb. 5, 2014.