Change Planned For Small Group Health Insurance

By David Darman on Thursday, February 27, 2003.

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A bill before the New Hampshire Senate would change the rules that govern health insurance for small businesses.

Proponents say it will hold the line on premiums, and bring in additional insurers.

But opponents argue the bill will benefit only the healthiest individuals.

NHPR’s David Darman has more.

The Republican sponsors of Senate Bill 110 point to small business health insurance costs that rise an average of 15 percent a year.

Lead sponsor Senator Russell Prescott of Kingston, says customers shouldn’t have to pay these persistently high costs.
03 19 so if you’re a healthy group, you should be able to pay lower rates for insurance costs in nh. We’re one of the healthiest states, I think we’re ranked either one or two for healthiest state in the nation. 03 30

Currently, New Hampshire requires health insurance companies to offer the same rates to almost everyone.

That’s called a “community rating” system.

SB 110 would allow companies to charge healthy people less.

At the same time, they could charge people with chronic conditions more.

Prescott says allowing companies to charge different rates will slow down premium increases.

That, he says, will attract more insurance companies to New Hampshire.

Currently, two companies, Anthem and Cigna, dominate the New Hampshire market.

Senator Prescott.
04 37 consumer choice, product competion, and relieving the pressures on premium increases. That’s the vitality that I think would happen in the marketplace with this bill, allowing more companies to come in, that are used to offering this kind of insurance to small group market. 04 53

Critics of the plan say it allows insurance companies to discriminate against people who need insurance the most.

Dr. James Squires is president of Endowment for Health, a group working for better healthcare in New Hampshire.

Squires says Prescott’s bill would allow companies that come into the state to grab the most profitable customers.
14 205 so, ultimately, this is I think, legal language that says we’re going to cherry pick. We’re going to really look for a company all of whom are 21, all of whom are in excellent health, and we’ll give you an absolutely terrific rate. That is not a societal way, in my opinion, to look at covering people’s health needs. 14 230

SB 110 doesn’t just allow insurers to raise rates based on health.

The measure would allow insurers to raise rates for several factors.

Yvonne Nanansi of Anthem Blue Cross and Blue Shield says a group’s occupation can trigger higher rates.
26 23 auto services, hotel and lodging, some restaurant services, gas stations, convenience stores. Those could be marked up, anywhere from 10 to 15% additional premium, just on that one factor alone. 26 42

Nanasi says Anthem Blue Cross has continued to insure many classifications in line with its history as a non profit insurer.

But Nanasi says that business philosophy may change if Senate Bill 110 becomes law.
29 29 anthem blue cross and blue shield is not a not for profit company anymore that is the insurer of last resort in the state. So that we will, if senate bill 110 passes, start to act like every other insurance company in the state then, and that is we will also …use the underwriting practices that are encouraged in senate bill 110. 29 53

New Hampshire’s community rating system doesn’t allow for rate differences between regions of the state.

But SB 110 would allow an insurer to charge more to customers who live on the seacoast, where medical costs are higher, than, say, in the Monadnock region.

What’s more, high insurance costs may have other causes than not enough competition.

Paula Rogers, New Hampshire insurance commissioner, says rates are rising because people age.
34 150... Increased utilization is the largest factor involved. People are using the health system more. The health system provides advancement in medical technology that people wish to access and should access for treatment. Pharmaceutical costs are up. 242

New Hampshire has had community rating for about 9 years.

A few years ago, state lawmakers debated a bill similar to Senate Bill 110.

Then Governor Jeanne Shaheen threatened to veto it if it passed.

But new Governor Craig Benson has said he’d like to see more competition in health insurance.

So SB 110 may have a better chance of becoming law in 2003.