Little relief seen in health-care bill
Gov. Bill Owens signed legislation this month to help address various health care issues that Coloradans confront, among them yearly rate hikes, which in many cases have surpassed 50 percent.
A report issued by the Colorado Division of Insurance last week says 4,680 Colorado companies eliminated health insurance coverage during 2001. Between 2000 and 2001, 81,845 employees in Colorado left the small market group, a decline of more than 15 percent. Health insurance premiums for small businesses have tripled over the last decade, according to the Colorado Division of Insurance.
Owens said House Bill 1003 is a good first step to help small businesses of one to 50 employees obtain affordable health insurance for their employees. The new law provides small businesses with more options for affordable health insurance, such as high deductible plans with medical savings accounts.
The bill, co-sponsored by state Sen. Bob Hagedorn, D-Aurora, and House Majority Leader Lola Spradley, R-Beulah, will allow insurance companies to offer additional health plan options to employers.
Owens said the bill is a good first step to help small businesses obtain affordable health insurance for their employees.
But Mark Mathis, a spokesman for Humana, the largest small group insurance carrier in the valley, said that it appears doubtful that this legislation will stabilize Colorado’s small-group health insurance market.
“Although it contains some interesting concepts, HB 1003 did not include incentives for consumers to remain covered in the small group market, which Humana considered a key component of any reform package,” Mathis said.
One of the biggest factors for the rate increases is that Colorado regulations don’t allow health insurance companies to rate the small-group market according to health status, Mathis said.
“The small insurance group market in Colorado is in crisis. The state Legislature needs to do something about it. Thirty-seven states allow health insurance companies to vary the premiums according to health status,” Mathis said.
Victor Lazzaro, president and chief executive officer of United Healthcare of Colorado, agreed with Mathis.
“It will help (new legislation), but it’s a drop of water in a very large drought,” Lazzaro said.
In turn, House Bill 1163, which passed the House and died in the Senate, included legislation more appropriate to stabilize the small group market, Lazzaro said.
“HB 1163, which had broad backing from a coalition of insurers and employers, would have gone much further by providing incentives that would have helped keep healthy people in the small-group market,” he said. “But it appears this bill was victim of partisan politics. This year, I give the House an A and the Senate a D for the health care legislation.”
Although a provision in the new law allows HMOs to use a higher deductible plan – and this could mean lower premiums- John Hopkins, chief executive officer of Rocky Mountain Health Plans, former Rocky Mountain HMO, also said rating by health status is a more important issue, especially for groups of one.
“The new law may help some, but it doesn’t solve the problem,” Hopkins said. “The reality is costs are high up there.”
Hopkins said the insurance company will be looking at the different components of the bill and take what makes sense.
“We’ll take a look at the proposed higher deductibles with medical savings accounts, and see if that is something employers want to buy,” he said.
Mathis said the insurance company will evaluate the specific regulations that are developed as a result of HB 1003.
“But Humana believes further action is needed to solve the problems plaguing Colorado’s small group health insurance market,” he said.
Veronica Whitney can be reached at 949-0555, ext. 454, or at firstname.lastname@example.org.