posted on: 7/19/2006
revised: 3/10/2010
Political activism is nice, but it does
not pay the bills. The National Federation of Independent
Business (NFIB) has been a major voice for small business for years
but has lost steam recently. Money Magazine, Fortune and CNN
all published reports this month pointing out the slide in NFIB
clout and popularity. Fortune Magazine wrote "This year the
NFIB found itself opposed not only by AARP, the American Cancer
Society, and 39 state attorneys general, but also by its ideological
allies". I would count myself as one of those ideological
allies that opposes the NFIB.
The NFIB serves three primary functions:
-
act as political advocate
-
provide educational resources
-
sell insurance to members
While purpose #1 and #2 get virtually
all of the media attention, only purpose #3 contributes to fund the
operation and existence of the organization. This editorial is
triggered by the fact that every media report seemed to entirely
miss this important point. Every good business journalist
knows that in order to understand what is really going on behind a
business trend, you must "follow the money trail". Apparently
this time they forgot.
I should disclose that I had personal
and philosophical disagreements with former NFIB CEO Jack Farris and
had published a number of critical articles.1 Mr.
Farris retired earlier this year after the NFIB lost a long-fought
and expensive battle over association health plans. Virtually
every independent commentator (including myself) and a long list of
large and respected organizations opposed the AHP proposal because
it simply was a bad idea that could not work, except to enrich NFIB
and other similar organizations.
Ask a typical member why they joined
NFIB and if they will give you the honest response that they joined
to get access to the association insurance program. This is
nothing new. Business associations and Chamber of Commerce
groups across the country have relied on association insurance
programs as a primary method of driving membership for at least five
decades. In fact, if there were no financial advantage to
membership in a business association, then these organizations would
have a much tougher time surviving.
The majority of our state insurance
departments are committed to the concept that a small business
should not have to join an association in order to have access to
the best insurance rates. Our health care affordability crisis
is not in any way connected to the source of our insurance
purchases. The same insurance rates must be available all
applicants in a similar class. Solutions to our health care
financing crisis will be found not in the distribution of insurance
products, but in addressing the real underlying costs that health
insurance covers.2
The legislative defeat of the
association health plan proposal combined with an growing knowledge
among small business owners (due to advancement of Internet-based
marketing of national insurance programs) that there is no
economic advantage to buying health insurance through an association
has clearly hurt the NFIB. That is the real story that needs
to be told here.
Footnote:
1
At the core of this disagreement was my belief that if the NFIB
really wanted to help address the health care concerns of its
members, it needed to listen to the independent expert voices in the
field of small business health care and not just those people in the
health insurance business who stood to gain financially from the
association health plan proposal. It was my observation that
the NFIB ignored the overwhelming body of independent evidence in
this field in favor of the path that would enrich itself.
2 My work through Freedom
Benefits Association is dedicated to promoting affordable solutions
like consumer driven health plans that have already proven to be
effective in reducing long term costs for small businesses.
Editorial Note: I no longer follow this topic and so
the content has not been updated since 2006; the comments are now
likely outdated.
keywords: NFIB, health care
reform, AHP
related topics:
Copyright 2010 by Tony Novak. Originally produced and published for the "AskTony" column syndication prior to 2007. Edited and independently republished by the author in March 2010. All rights reserved. |