The US Congress is considering legislation that would allow small companies to increase their health insurance buying power through business associations.
All four members of the New Hampshire Congressional delegation support the bill.
But Governor John Lynch says, as written, the bill won't help and could actually result in higher health insurance rates for the states small businesses.
NHPR Correspondent Julie Donnelly reports from Washington.
Mark Jaffee runs two small lumber companies in New Hampshire, with a total of about a hundred employees. He says health care has grown to be an expense - which is second only to payroll.
"it costs us more than rent, it costs us more than our tax bill, it costs us more than our trucks and our equipment leasing costs, more than our energy costs. It has really become a problem of affordability for the company to continue to provide quality health care coverage"
And he says there's another problem. Many small businesses don't have staff with the expertise to wade through all of the insurance information out there, and choose the plan that's best for employees. For those two reasons, he supports a bill in Congress that would allow small businesses to band together as associations for better health insurance buying power.
The bill passed in the House, with the support of both New Hampshire Congressmen. A similar version is now under consideration in the Senate.
Governor John Lynch opposes the bill and sent a letter to New Hampshire's Senators asking them to either vote against it, or change parts of it.
The Governor feels the bill would undermine the state's ability to regulate health insurance.
Lynch's spokesperson, Pamela Walsh, says state lawmakers just replaced a law enacted in two thousand three, that sent premiums through the roof.
And she says the Governor worries this federal legislation could turn the clock back.
"New Hampshire has made a choice, a bipartisan choice, to return stability to our small business health insurance market, and the federal government is trying to undo that. People were seeing their rates double, triple, quadruple in some cases because of rating rules very similar to what this federal legislation would impose on New Hampshire."
The now-defunct New Hampshire legislation allowed insurance companies to charge more for small businesses with sicker or older workers.
But 1st district Republican Jeb Bradley says the federal bill doesn't allow so-called cherry-picking.
"Every version of this legislation has a prohibition on the ability of an insurance company that underwrites the policy to be able to pick and choose who they want to insure."
But Walsh, the governor's spokesperson, says that while HMOs would have to insure every company - they could do so at widely different rates.
Senator Judd Gregg was unavailable for comment on the bill, but Senator John Sununu supports it.
He says the measure limits how much insurance rates can vary among companies.
And he argues that with such a vast and complicated problem such as the nation's health care system, it's important to see the big picture.
"There's no solution that will solve all the problems, but this will allow more businesses to offer health insurance to their workers. We've also increased the availability of health savings accounts to - another option available to workers. We've increased the deductibility of health insurance costs to those that are self employed"
The Senate Finance committee is hearing testimony on options for improving small business access to health care.
One of the analysts to give testimony was Len Nichols from the liberal New America Foundation.
He admits that the intentions of the bill are good ones.
But he says that once business associations secure a health insurance policy, they will likely choose to charge some firms in the group, more than others.
"Fundamentally what this bill is about is allowing some firms to find a way to offer health insurance cheaper, and lord knows everyone supports that goal. But the difficulty is that it would end up with some firms having premium increases pretty much immediately, and many firms having an increase in premiums over time"
The testimony also included consideration of an alternative bill - sponsored by two democratic senators.
The committee hasn't voted on the legislation yet, so there's no schedule for when the Senate might take up the issue on the floor.
For NHPR news, I'm Julie Donnelly in Washington.
