Pressure is mounting in the U.S. Senate to schedule a vote soon on legislation (H.R. 525/S. 406) intended to help small businesses with skyrocketing health insurance costs. But in spite of good intentions, the bill, if enacted into law, would drive up premiums for most small employers and put at risk the health care security of millions of small business employees who rely on employment-based coverage.

The measure, known as the "Association Health Plan" bill, is based on a concept that is ordinarily near and dear to small businesses: reducing costs by eliminating government regulations. But in this case, pre-empting relevant state rules would reduce costs and increase profits for big health insurance companies, but not for small businesses.

This bill would exempt health insurance plans marketed through business and professional associations from states' insurance laws and regulations: consumer and patient protections, minimum coverage requirements and limitations on premiums that insurers can charge small employers.

Not all of these requirements are equally important, or even reasonable. But they all trace their origins to past abuses: insurance companies that refused to pay claims, insurer bankruptcies that left consumers stuck with huge hospital and doctor bills, managed care plans that denied subscribers' access to needed health care services, fake trade associations set up solely to sell "Swiss cheese" health insurance policies (i.e., full of holes).

Those of us who work daily with small businesses that are struggling to afford health insurance -- as well as 50 state insurance commissioners, more than 1,000 consumer groups, scores of local and regional small business groups, legions of actuaries, expert analysts and even the Congressional Budget Office -- foresee expensive consequences if this legislation is approved.

1. Association Health Plans could/would omit or minimize coverage for baby delivery and neonatal care, cancer treatments, diabetics' supplies, prescription drugs and other expensive health care services. These limitations would ward off small businesses that employed women of child-bearing age, middle-age or older people, those with acute or chronic illnesses, etc.

2. Association Health Plans would set small companies' premiums tied to their employees' risk characteristics: age, gender, details of individual medical histories. By quoting stratospheric coverage prices for small businesses that employed workers with nonoptimum health status, Association Health Plans would assure themselves of a profitable, low-risk population of insureds.

3. Without government financial oversight, poorly managed Association Health Plans would tend to go bankrupt and leave affected workers and families with potentially huge unpaid medical bills. Unscrupulously managed plans would set up administrative obstacles (e.g., gatekeepers) to prevent subscribers from accessing needed health care services.

Small businesses with favorable employee health risk characteristics would be able to buy less expensive health insurance coverage through these plans. But the obvious question is, "What would happen to the four out of five small businesses that wouldn't (or, rather, couldn't) buy coverage through an Association Health Plan?"

After these plans had cherry-picked small employers with the healthiest work forces, the remaining population of small business employees and dependents would have hugely disproportionate numbers of older people, women and persons with chronic and acute health conditions. According to the Congressional Budget Office, this would cause average health insurance premiums for these employers to increase by at least another 14 percent -- on top of the crippling 20 plus percent annual increases with which they already struggle to cope. Inevitably, these higher insurance costs would force more employers to drop coverage, and the ranks of the working uninsured would grow even faster.

Association Health Plan supporters are unable to account for these fatal flaws, except to assert that compassion among insurers and their association partners would trump the profit motive. Furthermore, the arguments made most often in favor of Association Health Plan legislation are no better than superficially valid. For instance, proponents argue that their purchasing clout would reduce costs. This would undoubtedly be the case in the handful of states that don't encourage association-sponsored health plans. But in Pennsylvania, as in most states, small employers already buy billions of dollars of coverage each year through organizations like mine, and economies of scale and administrative efficiencies are already fully realized.

Also, it's true that large self-insuring firms are exempt from many state insurance requirements that bind small businesses. But big companies (Wal-Mart notwithstanding) typically offer benefits at least as generous as those required under state law, and their employees pay less out of pocket than their small business counterparts. Employers of large, diverse work forces also try to reduce costs by concentrating on employee wellness and health education, disease management and illness prevention.

This isn't to say that some state laws don't add significantly to exploding health care costs. For instance, medical malpractice laws add billions of dollars to employers' health insurance bills, but don't help patients. The underlying drivers of our growing health care affordability crisis are societal consumption of health care services that is, by far, highest in the world, and unit costs of health care services that are also, by far, highest in the world. Even worse, it is credibly calculated that at least one-third of our immense national health care tab is waste -- money spent on health care activity that either hurts someone or doesn't help anyone.

Whether we maintain the current employment-based approach through which most working Americans have health insurance coverage today, or we eventually convert to a nationalized health care system, our country can't be economically competitive, and our citizens can't be confident of their future health care security, unless we tame the monster of runaway health care costs.

We must deal with the 600-pound gorilla sitting in the national living room -- health care spending that is approaching one-sixth of U.S. gross domestic product. This will require nothing less than wrenching changes in health care delivery, health care financing (e.g., no payments for preventable patient injuries such as hospital-acquired infections) and individual accountability for behavioral choices.

Rather than helping, enactment of the Association Health Plan bill would make our national problems worse. It would be morally, politically and economically bankrupt to enact a federal law that would trigger discrimination against women (because of pregnancy?), middle-aged and older workers (because the young and healthy will remain so?) and people who have health issues (because illness is linked to personal choice?). Shifting costs from a group of businesses and employees, or a group of taxpayers, to another, simply isn't the way to solve our health care crisis.