Thursday, 29 March 2007
Colorado Lawmakers Ready Plan To Lower Insurance Costs For Small Businesses
Colorado’s House of Representatives is expected to introduce legislation to roll back a law that allows insurance companies to set small group insurance rates based on members’ health.
Currently, companies selling small business health insurance are able to charge higher plan rates based on age, location, industry, existing medical conditions, and claims history of their members. The law only applies to businesses with less than 50 employees.
Supporters of the new bill say small businesses and employees are hurt with unfairly high insurance premiums because of this law.
“[The goal is to] make health insurance for small business more affordable and more easily accessible,” said State Representative Tom Massey. “We hope to increase coverage.”
The measure is facing strong opposition from the insurance industry. They argue the roll back will decrease competition in Colorado, leading to higher rates in the long run.
Industry representatives also point out there is a provision in the current law offering discounted rates for healthier members. If the new legislation is passed, the discounts will be taken away. One study done by the Colorado Association of Health Plans found twice as many small businesses benefit from the current law then are hurt.
But lawmakers still contend that the higher set rates are making health coverage too expensive.
“We think it will be very beneficial for small businesses in Colorado. And long term, it will benefit Colorado’s economy,” said Massey.
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