New Hampshire Gov. John Lynch’s plan to help small businesses facing stiff health insurance costs passed its first hurdle last week in the Senate. The new plan steps back from reforms enacted just over a year ago under Senate Bill 110, which allowed insurance companies to look at a business’ location and worker health in setting premiums for companies with up to 50 employees. This drove up costs for businesses with older or sicker workers and those in areas where health care costs are higher, such as the Seacoast.
An outcry from businesses led to several proposals to reform the law this year. Lynch and several senators brokered the deal approved last month, though it will be sent to the Senate Finance Committee for further review. A similar measure also won support from the House Commerce Committee. Under this proposal, insurers could not consider a business’ location or the health of its workers. Insurance companies still would be able to consider workers’ ages and their industries. For potentially very expensive cases, insurers could pass certain workers into a reinsurance pool, which would be paid for with an assessment on all policyholders. Workers no longer would be required to fill out health forms before premiums are set. Forms would be filled out after policies are written so insurers could identify high risks for the reinsurance pool.
Opponents argue the new plan will drive insurers from the state, giving businesses fewer choices. But supporters say adding a new reinsurance pool will allow more companies to offer policies without fear that a single high-risk policy will put them out of business.
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