Bill fixing health purchasing alliances gains

New Hampshire chambers of commerce want more flexibility in the state's health insurance purchasing alliance law, and it looks like they are going to get it, despite the concerns of insurers.

The concern of the local chambers and the Business and Industry Association of New Hampshire is that the law enacted last year presents a catch-22. In order to prevent unscrupulous groups from forming a new organization to cherry-pick healthy workers, it set forth an either/or requirement. A purchasing alliance either had to be in existence for 10 years and not formed solely for the purpose of selling health insurance or, if new, it would have to accept all comers.

The dilemma, say the chambers, is that they want to set up a new organization to administer such an alliance strictly on behalf of their members. So the new organization won't be 10 years old and wouldn't accept all comers, but since the membership would be restricted to that of the 10-year-old organization, and therefore wouldn't cherry-pick, it would fulfill the intent of the law.

The Insurance Department agrees, and says it would allow such an administrative arm under the old law, but chambers want it spelled out in the law before going forward, arguing that they are desperate to get some relief.

How much relief this will provide, however, is uncertain. First, the alliances would not give a small business all the advantages of a larger group rate. Most of the rating factors would be based on the individual business, not the alliance itself.

But the group might be able to achieve some savings through sharing administrative costs and being able to institute some risk management programs — such as smoking prevention and exercise incentives — that would improve wellness and lower the number and the amount of claims.

At a Tuesday hearing on Senate Bill 179 — which would address the chambers' concerns — Harvard Pilgrim Health Care outright opposed the bill, at least before it was amended to clean up some language, arguing that it could hurt the small risk pool by "further fragmenting the market," said lobbyist Ed Dupont, who spoke against the measure. "More importantly, without addressing the medical cost, a purchasing alliance won't be effective in the long run."

Anthem Blue Cross and Blue Shield's Paula Rogers also said her company was worried about fragmentation — that the more healthier groups would join the alliance, leaving the riskier workers in the general small health pool, which was becoming riskier as it is, resulting in the very premium increases which small business have been concerned with.

But she was appeased by the amendment's new language.

And at the end of the hearings, most of the members of the committee seemed so as well.