Gov. Ritter has until June 4th to sign or veto measure
Face the State Staff Report
DENVER - A leading Colorado business group is cautioning Colorado small business owners and their workers that the governor’s signature on a health care bill could result in significant hikes in their health insurance premiums, with a long term result of fewer insured employees.
According to The Colorado Association of Commerce and Industry, two-thirds of Colorado’s small businesses could experience rate hikes as a result of the passage of House Bill 1355, a bill currently awaiting Governor Bill Ritter’s signature.
Gov. Bill Ritter, D-Denver, has until June 4 to veto or sign into law the controversial bill.
The bill would prevent insurers from considering employee health and claims history before setting premiums for small businesses. Joining CACI in its opposition to the bill are the Independent Bankers of Colorado, the South Metro Chamber of Commerce and the Colorado Association of Health Plans.
The measure would also eliminate rating flexibility based on health status and claims history. Sponsored by Rep. Anne McGihon, D-Denver, Rep. Tom Massey, R-Pueblo, and Sen. Bob Hagedorn, D-Aurora, the bill would specifically eliminate certain rating characteristics currently utilized by health insurance providers to establish small business health insurance rates.
According to Donnah Moody, vice president of government affairs for CACI, "if insurers can no longer discount the cost of healthcare based on how healthy the subscribers are, and if everyone in the pool is forced to cover obese smokers that don’t exercise, then rates have to go up. The result will be fewer people with health insurance coverage."
Currently, health insurance providers in Colorado are authorized to make premium adjustments to small group health rates based on tobacco use, family size, age, geographic location, health status and claims experience. Under HB 1355, health status and claims experience would be removed as possible criteria.
The bill’s supporters argue that the current system increases the burden on small businesses with employees who have an increased number of medical claims. But its opponents say the net result will be that small businesses with healthier employees who file fewer claims would no longer qualify for modest adjustments to their insurance premiums. They say this change will drive healthier employees out of the health insurance market as premiums become increasingly expensive. As a result, they add, the remaining system where fewer, less healthy individuals are paying premiums will lead to cost-shifting and eventually higher premiums for all.
Moody further argues that action on the measure is premature. In 2006, state legislators joined together to establish the 208 Commission, a body charged with developing comprehensive statewide healthcare reform. According to Moody, serious changes to current law, including this measure, should be considered under the work of the commission. The commission is not scheduled to report its suggested proposals to legislators until January 2008.