House backs health insurance purchasing alliances

New Hampshire businesses will be able to join together to purchase health insurance if a bill that passed the House on Wednesday becomes law.

House Bill 5915 would allow businesses to buy health insurance coverage either through a chamber of commerce an existing trade association or a new formed organization. As soon as the purchasing alliance reaches a threshold of 3,000 covered lives, the alliance will be eligible for an experience rating, and possibly lower insurance rates.

(No organization would be able to exclude an employer because of a bad claims history however.)

“This a giant step forward in reducing the cost of insurance for small businesses,” said Rep. Sheila Francoeur, R-Hampton, chair of the House Commerce Committee.

Opponents of the bill said that the groups would not be large enough to have any substantial effect on premiums, and that the bill would allow many small businesses to bypass small insurance brokers, driving them out of business. They argued that the bill was introduced at the last minute and more public input was needed before becoming law.

“You want to wipe out 500 small businesses [insurance brokers] without giving them a chance to come in talk you,” said Rep. Lee Quandt, R-Exeter.

Quandt and other opponents, also noted that Senate Bill 125 – the bill that was bringing community rating back to the state – had barely gone into effect, and the new proposal would only be adding yet another major change. SB 125 was passed last year to correct what were seen as flaws in SB 110, which was enacted in 2003.

“We don’t know what the problems in 125 are yet,” said Quandt. “Slow the train down. Let’s give industry a breather.”

But supporters said that the amended bill was scrutinized during numerous subcommittee meetings, that most of the additions had already been adopted in Insurance Department rules years ago, and that SB 125 only deals with groups of businesses with fewer than 50 employees.

Proponents also argued that HB 5915 would allow small businesses dissatisfied with their rates under the new law to join a larger group in order to increase their bargaining position, as well as well put programs in place to keep employees healthier, enabling them to reduce claims and lower premiums. – BOB SANDERS