Bill would let small businesses join insurance pool

Posted: Sunday, May 04, 2003

JUNEAU (AP) Small businesses and nonprofit agencies could pool together in hopes of getting a better deal on health insurance under a bill that passed the House on Friday.

One of the bill's sponsor's, Rep. Cheryll Heinze, R-Anchorage, said the measure is intended to help some of the estimated 116,000 Alaskans a sixth of the population who don't have health insurance.

But the leader of a group that works with nonprofit agencies doubts the bill will make a difference for those agencies.

Pooling itself does not get at the root problem, which is not availability of insurance in Alaska, but affordability,'' said Dennis McMillian, president of the Foraker Group in Anchorage. It helps a little bit, but it doesn't help enough to make it affordable for most, especially the nonprofits.''

At best, pools reduce costs by 3 to 8 percent, said McMillian, who has been working on the issue for several years.

Rep. Norman Rokeberg, R-Anchorage, is another sponsor of the bill. He agreed pooling won't make a big difference in cost, but said it may provide more choices and may prevent costs from rising as rapidly as they otherwise would.

The National Federation of Independent Businesses has endorsed the bill.

An early version called for the state to be involved in setting up the insurance pool, but that was removed before the bill got to the House floor.

House Bill 10 now allows such pools, but leaves it up to insurance companies and people who want to cooperate in buying insurance to set up the agreements.

It prohibits insurance companies from discriminating in setting rates based on pre-existing medical conditions of employees of a small business or nonprofit.

Self-employed individuals could also join, but the measure would allow insurance companies to base rates on an individual's pre-existing medical problems, or to deny the individual coverage, said Helen Bedder, an aide to Heinze.

A similar bill passed the House last year, but died in the Senate Health Education and Social Services Committee, then headed by Sen. Lyda Green, R-Wasilla. Green, whose husband sells insurance, opposed state involvement in setting up the pools.

This year, she is co-chairman of the Senate Finance Committee. Green said Friday she had no problem with simply allowing businesses and nonprofits to band together in buying insurance.

I support that, with the caveat that the state is not involved,'' Green said.

Rep. Sharon Cissna, who has been involved in efforts to allow insurance pooling in the past, said she also believes it's better to have insurance companies and consumers work directly with each other without state involvement.

There was a great deal of concern that having the state act as a middle entity in this was going to hamper what the insurance companies had to do, which was be a very big player in the creation of the pools and the designing of the package,'' said Cissna, an Anchorage Democrat.

They are the ones that know the market,'' Cissna said. They have to make a profit in order to stay alive and well in Alaska.''

The bill passed the House 37-0.

It now goes to the Senate for consideration.

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