From his campaign through his inauguration, Governor Lynch has been calling for a repeal of the state’s health insurance law, SB 110. The bill has been criticized as loading insurance companies with paperwork and smacking many small employers with higher premiums. Last week Governor Lynch announced that he was backing a compromise in changing the law through a new bill, SB 125. The key element to the bill is the creation of a high risk pool. NHPR’s Kerry Grens explains what a high risk pool is and how it would affect insurance rates.
Under SB 110 one sick person at a company could make the premiums for the entire company skyrocket.
As Director of the North Country Health Consortium, Martha McLeod has witnessed her own premiums go up by about 35 percent.
She has also seen some disturbing and unintended consequences.
McLeod: Employers start to almost screen employees before they hire them, because of the medical status and worrying about that, which is a discrimination thing but it becomes almost a concern up front.
As an employer and as a state representative, McLeod is interested in the proposed bill and thinks it shows promise.
Under the new measure employers would have no need to focus on the health of any single worker.
A high risk person in the group would no longer be the responsibility of a single employer, or even a single insurance company.
Instead, people with high medical bills would be lumped together, and the costs of their claims would be shared among insurance carriers in the state.
Doug Sherer is an insurance broker in the north country.
Sherer: It’s basically designed to help out insurance companies deal with a catastrophic claim in a small group so they don’t have to penalize the small employer for that one particular individual who has a health problem.
Here’s how it works:
The monthly premium would be based on factors including the type of industry and the age of the workers.
Employees would still have to fill out the health status forms used under SB 110.
But that information would only be used to determine who stays in the insurance carrier’s pool, and who goes into the high risk pool.
Leslie Ludtke is the health policy analyst for the state’s insurance department.
She says the change wouldn’t save money overall, but simply redistribute the cost, both among insurance carriers, and among employers.
Ludtke: There would be, obviously, premium reductions for probably smaller groups with unhealthy individuals and premium increases for younger and healthier individuals.
The proposal is based on a program Connecticut has had in place for about fifteen years.
Connecticut administrator Karl Ideman says it has stabilized premiums and maintained competition.
Ideman: It has served to keep a relatively larger number of carriers actively participating in the market than most other states.
That’s significant for the original SB 110 supporters, whose goal was bring more insurance carriers to the state.
The latest plan may sound like the perfect compromise between employers and carriers, but insurance broker Doug Sherer remains cautious.
Sherer: The carriers have already been shoved a huge, very costly administrative nightmare called SB 110 a little over a year ago. And I would caution that they would not want to shove something else into the marketplace that is going to be an administrative nightmare.
There will be costs to managing the reinsurance pool, which would be passed along to employers.
But the bill’s chances in the senate are looking good.
The measure is competing with a number of other bills in the house and senate, all attacking SB 110.
Representative McLeod from the north country is looking forward to considering them all, so long as she can overturn the current law.
For NHPR News, this is Kerry Grens.
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