STATES AIMING FOR A CRUCIAL TARGET: SMALL BUSINESS COVERAGE
Volume 28, Issue 492 May 25, 2007
Matthew Gever
The list of states that are trying to help small businesses provide health coverage is growing.
A slew of health-care-related bills signed into law last month by Washington Governor Christine Gregoire includes one specifically aimed at helping small businesses obtain coverage. HB 1569 authorizes the creation of the Washington Health Insurance Partnership. Similar to the “Connector” mechanism created in Massachusetts, the Partnership will offer benefits administration to small employers that have at least one employee who earns less than 200 percent of the federal poverty level (FPL). The Partnership also will provide sliding-scale premium subsidies to individuals who earn less than 200 percent of the FPL.
The Partnership was one of 16 recommendations contained in a report issued last January by the state’s Blue Ribbon Commission on Health Care Costs and Access. “We decided that we had to step out, like some of our colleague states, and be a laboratory” for finding new health-care ideas, said Governor Gregoire at a news conference.
Many of those reforms were included in SB 5930, which the Governor also signed. Among other provisions, the bill calls for establishment of a quality forum to promote evidence-based practices, improved transparency of cost and quality information for consumers, and the testing of a “health opportunity account” in Medicaid.
Paperwork Reduction
In Iowa, Governor Chet Culver signed two bills this session aimed at small businesses. HF 790 is intended to help small firms pool their purchasing power by joining or setting up associations that buy coverage. “By banding together, they will qualify for lower insurance rates and will be able to provide coverage for their employees,” said Representative Ro Foege.
The law also allows insurance companies to provide discounts to small businesses that implement employee wellness programs, such as anti-smoking programs. Specifically, if a small business shows improved health outcomes and has fewer employee claims as a result of a wellness program, the insurance company is allowed, but not required, to transfer that small business into another insurance class with lower rates.
The other law, SF 346, is designed to simplify the insurance application process for small businesses. Currently, employers who want to compare insurers’ products must fill out a separate form for each company.
“When I market health insurance and I go to an employer as it is today, if they want competitive bids I have to have them fill out applications for Principal, Wellmark, United, Coventry—in other words each employee would have to fill out four applications,” said Senator Tom Rielly, who works in the insurance industry. Under SF 346, an employer would only have to fill out one form, which all bidding companies would reference.
“What we’ve done is increase the bargaining power of small businesses in two ways,” said Senator Rielly. “One, they can choose to work with associations to get a better deal on insurance. Two, if they choose to work with insurers directly, the simplified application form means it will be easier for business owners to compare insurance offers on an apples to apples basis.”
Lone Stars No More
In Texas, the Senate has passed and a House committee is considering SB 922, which would encourage counties to test models for small business coverage. Intended to maximize flexibility and local control, the legislation would enable county commissions to establish local or regional health-care programs, which could offer insurance or health services.
The state Health and Human Services Commission would use general revenues to provide start-up grants to seven of these programs, which could include health savings accounts and high-deductible plans. The grants would average $150,000 each, for a total cost of $1.05 million in FY 2008. In addition, the local/regional programs could apply for additional funds from a “health opportunity pool,” created under an 1115 waiver from Medicaid.
It is expected that employers, employees and the state would jointly share the cost of premiums or health-care services. The programs would be required to allow any individual who receives state premium assistance to enroll.
“In many cases, owners care deeply about their employees and would love to provide insurance but they simply can’t afford it,” said Texas Senator Kirk Watson, who introduced the legislation.
© Copyright 2007, State Health Notes
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