Why fiddle with small-group coverage before next year?

Rocky Mountain News Editorial 

4/10/07

      Out there somewhere is the Blue Ribbon Commission on Health Care Reform, hammering out various proposals that would change, maybe even improve, the way care is delivered in Colorado.

      It's supposed to produce its recommendations by year's end, in time for consideration by the 2008 legislature.

      So why is the 2007 legislature debating major health-care overhauls independently in a rush-rush manner late in the session, when there's not enough time to analyze them?

      House Bill 1355, introduced two weeks ago, would undo changes in small-group health coverage that were implemented just four years ago and seem to be working. It is scheduled for debate on the House floor this week.

      But consideration should be postponed until next year, when the idea can be debated in coordination with other proposed reforms.

      HB 1355 would remove claims experience and health status as factors that may be considered by an insurance company in setting rates for small employers.

      Before the 2003 reforms, "community rating" was the rule. That prevented health insurers from offering discounts to companies that had younger (or at least healthier) employees. Those companies were lumped in with other groups and had to pay the same insurance rates.

      Companies with healthy employees tended to drop health coverage under this system, since their employees had to pay the same premiums as those at "sicker" companies.

      And when the healthy companies dropped out of the system, only the high-use companies remained, driving insurance premiums ever higher.

      In 2003 the law was changed so that insurers could offer discounts of up to 25 percent to companies with good health records and relatively few claims. Those with poorer records could be charged a premium of up to 10 percent.

      Preliminary, albeit sketchy, evidence gathered by the state insurance commissioner's office indicates that this so-called "rating flexibility" has increased the number of companies offering health-care coverage to employees and their families.

      To be sure, the business community is split on 1355. Health insurers like Anthem Blue Cross Blue Shield, the state's largest, are vigorously against the bill. So are many subscribing companies. But the National Federation of Independent Business is for it. Other business groups are caught in the middle.

      Supporters of 1355 also include those who believe one-size-fits-all is somehow democratic, and there should be no reward for those companies whose employees try a little harder to stay healthy.

      We tend to believe in flexibility. Why shouldn't those companies whose employees put in for fewer claims enjoy some sort of reward?

      Even if that's not the case, it's too soon to drop rating flexibility. The House should kill 1355 and take up the issue again next year after the health commission makes its report and recommendations.