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Health Insurance Access Act

State Capital Bureau

February 21, 1995

JEFFERSON CITY _ Some insurance companies say they sell "peace of mind," but not all of their customers agree with that product description.

Jim Tuscher told the Senate Public Health Committee Monday of the lack of faith he has in his health insurance.

"Unlike many people with disabilities, I have good health insurance," said Tuscher, a lobbyist for Paraquat.

"However I have absolutely no confidence that I'll still have insurance in six months, much less six years, if health insurance companies are allowed to continue their current practices."

Tuscher, also representing the Governor's Council on Disability and the Missouri Association of Centers for Independent Living, testified in support of the Health Insurance Access Act at a recent hearing of the Senate Health Committee.

The bill would expand access to health insurance by requiring insurers to carry standard benefits packages and sell coverage at standard rates by region. The bill also would establish an annual 30-day open enrollment period and would limit exclusions based on preexisting conditions.

Finally, the proposal would give policy holders the right to keep their insurance when they change jobs _ a concept called portability.

The measure is similar to the health-insurance regulations contained in the governor's package last year. The governor abandoned any health-insurance regulation effort this year, saying opposition from the insurance industry was too strong for success.

Like last year, insurers say the standard rates provision in the bill would unfairly require the young to subsidize older customers.

"Community rates would result in dramatic rate increases for younger, healthier workers at the low point of their earning potential," said Milt Svetanics, assistant general counsel for General American Life Insurance Company.

"Those folks will have to subsidize their older parents who are 55 and 60, who are working and are at higher levels of their earning potential," Svetanics said.

But without standard rates, Missourians cannot get the insurance coverage they need, Tuscher said.

He told the committee of a 50-year-old Missouri woman who had triple bypass heart surgery. The surgery was covered by her husband's insurance, but the woman was forced to find other insurance when her husband died a year later.

"After a month of shopping, only one company offered her a policy, and the annual premium was $19,000, with a $10,000 deductible," Tuscher said. "That's ridiculous. We need a health-care system that bases premiums on community ratings, not on preexisting conditions."

Insurers are concerned that the bill's provisions on open enrollment and portability would allow people to wait until they become sick to buy insurance.

"That will have a tremendous impact on the cost," Svetanics said. "Only individuals who are sick will buy insurance. That will continue until insurance is impossible for anyone to afford because the cost of the insurance will be the cost of the claims."

But proponents of the bill say that without portability, people can be caught in a vicious circle. They might have an illness that has made them physically incapable of performing their current job, but they cannot change jobs without losing the insurance that covers the costs of treating their illness.