N.H. Gov. Joins Foes of Association Health Plan Bill

May 3, 2006

New Hampshire Gov. John Lynch has joined a chorus of state leaders opposing a bill in the U.S. Senate that would let small businesses buy health insurance policies exempt from state coverage requirements.

Senate Bill 1955 would allow businesses belonging to a trade or professional association to band together across state lines to buy health insurance. The idea is to lower insurance costs for small businesses so more of them could afford at least some coverage for their workers.

Supporters, including organizations such as the National Federation of Independent Businesses, say it would save small businesses about 15 to 30 percent.

Opponents say the bill would let insurers ignore state requirements such as insurance coverage for mammograms or diabetes equipment. The attorneys general of 39 states protested the bill last week, saying they did not want to trade strong state protections for weak federal oversight.

Lynch appeared at a news conference Tuesday with representatives of the American Cancer Society, AARP and the American Diabetes Association to object to the bill. They feel the legislation would force New Hampshire to return to the days of SB110, a recently repealed law that they say allowed insurance companies to discriminate against sick workers and that dramatically increased insurance rates for small businesses in the state.

“We declared, as a matter of public policy, that insurance companies could not discriminate against sick workers. We said that insurance companies could not discriminate against companies based on geography. We said that no employer should bear a disproportionate burden to provide health insurance to his or her employees,” Lynch said.

U.S. Judd Gregg, R-N.H., who supports the federal bill, saying it maintains critical state regulation to ensure consumer protections, wrote to Lynch on April 5.

“I am well aware of the recent instability in the New Hampshire small group health insurance market and have been working closely with the New Hampshire Insurance Commissioner to insure that S. 1955 will not cause similar problems,” he wrote. “I am also continuing work with the chairman of the Senate Health, Education, Labor and Pensions Committee to make further improvements to the bill to provide additional protections to consumers. … I do not take lightly any legislation that impacts delicate markets.”

The federal bill has some support in New Hampshire. The New Hampshire Lodging and Restaurant Association said the bill would increase access to affordable health care for many working people. The trade group said the average annual cost of health insurance for small businesses had risen from $4,000 per person in 2000 to about $8,000 this year.

“The doubling of this cost has left, on a national level, 60 percent of workers in the small business sector uninsured,” said the group’s president, Michelline Dufort. “Providing affordable and quality health care remains one of the greatest challenges that our members in the hospitality industry face.”

The Home Builders & Remodelers Association of New Hampshire also supports the bill.

However, John Thyng, director of New Hampshire for Health Care, said in a statement the bill would return the state to the days when insurers were allowed to set rates based on the health status of workers, making it very costly for companies with sick or older workers. He also warned it could invalidate state laws such as “Michelle’s Law,” which requires insurers to maintain coverage for college students who have to take a medical leave of absence from school.

“We can’t go back to the days of insurance company ‘cherry picking,’ when they were able to charge their ‘worst,’ or most sick customers, over 25 times what they charge their ‘best,’ or healthiest customers,” he said. “That’s just wrong.”

Peter Davies, a spokesman for the American Cancer Society, said the bill would not only loosen standards for the new insurance products, but also would remove coverage guarantees for many people who have private health insurance now.

“While affordable health insurance for all citizens is a goal that the American Cancer Society, AARP, and the American Diabetes Association all share with many partners, eroding current state protections is not an acceptable approach,” he said.

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