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Small-Business Health Insurance Bill Voted Down

May 15: San Francisco - A divisive bill that would have allowed health insurers to preempt state-mandated benefits in order to extend coverage to small businesses was defeated by the U.S. Senate late Thursday.

The Senate voted 55-43 to stop considering the Health Insurance Marketplace Modernization and Affordability Act of 2006, or S. 1955, which was introduced last year by Sen. Mike Enzi, R-Wyo., and co-sponsored by Ben Nelson, D-Neb., and Conrad Burns, R-Mont.

The bill needed 60 votes to go on to a debate that would have led to a vote on final passage, said Zach Goldberg of the American Diabetes Association.

The bill, which critics considered a major reform effort, would have allow private insurers to bypass state regulations requiring coverage of things such as preventive cancer screenings, mental health care, diabetes supplies and routine women's health care.

It pits advocacy groups such as the American Diabetes Association and AARP against powerful small-business lobbies such as the National Association of Realtors and the National Federation of Independent Business. See full story.

"The Senate's failure to allow an up-or-down vote on this important health care legislation is an insult to America's small businesses," U.S. Chamber of Commerce Chief Executive Tom Donohue said in a prepared statement. "The Senate has decided that small businesses do not deserve the same access to health care, advantages of economies of scale, and administrative efficiencies as larger businesses and unions." "Senators who have blocked this legislation have done so at their own peril," he added.

Advocacy groups struck a different chord. "Today, millions of Americans with diabetes dodged a bullet. Because of the vote in the U.S. Senate, state health coverage for diabetes has been protected," said Hunter Limbaugh, chair of the American Diabetes Association's advocacy committee.

"This bill was fundamentally flawed, as it would have jeopardized the health care coverage that millions of Americans with diabetes rely upon daily to manage their disease and prevent its serious and costly complications." AARP was concerned the bill would have provided a disincentive for employers to hire and retain older, sicker workers.

"AARP commends Senators Mike Enzi and Ben Nelson for searching for ways to help small businesses afford important health care coverage for their employees," Chief Executive Bill Novelli said in a prepared statement. "But while we look for ways to address the problem of affordable health care, we should not help one group of people at the expense of others. "