GOP vs. Dems on Insurance Pools: Just "Semantic" Differences?

(AP Photo/Pablo Martinez Monsivais)
Both Democrats and Republicans agree that small businesses should be able to pool together to negotiate for health care coverage, in order to reduce their costs. They can't agree on how to pool those groups together, however.

Democratic Rep. Rob Andrews (N.J.) said the Republican proposal and the Democratic proposal comes down to a "semantic difference." Does it really?

Republicans put forward in their legislation (PDF) a plan to allow for the creation of "association health plans." Groups like trade industries could create pools to purchase insurance for their employees. They would not have to meet any government-mandated, minimum benefit requirements -- associations would be able to determine which benefits they are willing to pay for.

By contrast, Democrats want to set up government-based "exchanges" in which small companies can pool together. The House passed a bill that included a federal exchange, while the Senate bill would set up state-based exchanges. Insurers offering plans in the exchanges would have to offer a package meeting minimum standards.

"You're defining exactly what kind of insurance people can have," Republican Rep. Paul Ryan (Wisc.) said. "It's just a difference in philosophy."

President Obama said, "We should set up minimum standards... at least solid enough that if your kid got sick, they're actually going to be treated.

"The issue here is... how much should government set a baseline versus just letting people decide, 'I can't really get decent insurance, but maybe this is better than nothing," he added.

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