Lawmakers unveiled legislation Monday that aims to protect small businesses and their workers from drastic health insurance rate hikes.
The proposal is one of several pending this session to increase health coverage in Colorado while a commission studying comprehensive reform completes its work.
The newest bill, by Reps. Anne McGihon, a Denver Democrat, and Rep. Tom Massey, R-Poncha Springs, would prohibit health insurance companies from using the health history of workers in setting rates for businesses with 50 employees or fewer.
“It’s not often in the arena of health reform that we see a clear problem with a clear solution, but this is one of those rarities,” said McGihon.
“This proposal will prevent insurance companies from increasing that burden just because of an individual employee’s health issues,” Massey said.
Although the proposal has a Republican and a Democratic sponsor, House Minority Leader Mike May said, “It is going to take a lot of effort to roll this thing through the legislature.”
May, R-Parker, said he supports the concept. But he expects insurance companies and members of his Republican caucus will oppose it.
Indeed, Sally Vogler, spokeswoman for Anthem Blue Cross Blue Shield, said: “It’s really trying to solve a problem that doesn’t exist. We think it will set us back.”
Sponsors rolled out the plan at a news conference with Nathan Wilkes, a computer security expert who works for a small company.
Wilkes told how rates at his company jumped to prohibitive levels after his son was born with severe hemophilia.
“Everyone at my employer experienced substantial increases,” he said. “When you have a chronic condition in a company … it affects everybody in that company.”
In such cases, he said, “many fall out of coverage because they can’t afford it anymore.”
McGihon said the state prohibited so-called rate banding based on issues such as health history and geographic location from 1994 until 2003. Since then, she said, “rates have gone up and health status has gone down. We’ve just got to change the status quo.”
According to statistics from the Colorado Division of Insurance, the number of small-business employees with health insurance has dropped by more than 100,000 since 2000, while premiums have jumped from just over $2,500 to $4,000.
The bill would address only rating based on health history, not factors such as age and location, McGihon said.
Kaiser Permanente is expected to be one of the few health insurance companies backing the plan.
“We were opposed to (rate banding) being put into law in 2003, and I fully anticipate that … we would be supportive of that change,” said Jerry McElroy, director of government relations for Kaiser in Colorado.
The Associated Press contributed to this report.
