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Health plan for small business sent to House

February 12, 1998
By: Brent P. Johnson
State Capital Bureau

JEFFERSON CITY - Missouri government would get into the business of packaging health coverage plans for small-business workers under a measure heading to the full House for debate.

A bill offering health insurance coverage to small businesses with fewer than 50 employees passed the House Critical Issues Committee Thursday.

The bill, sponsored by Rep. Tim Harlan, D-Columbia, who also chairs the committee, would make the same health insurance plan covering state employees and participating local government employees available to qualified businesses.

The business sector is split on the issue. Missouri's Chamber of Commerce is against it while Associated Industries of Missouri has said it is neutral.

According to Harlan, however, the National Federation of Independent Business supports the bill.

Under the Missouri Consolidated Health Care Plan, insurance companies bid rates to provide coverage to the two pools - state and local government employees. Though the companies bid separately on each pool, they are required to bid on both.

The proposed legislation would create a third pool of small business employees starting in January 2000. The companies would then be required to bid on all three pools.

Keeping the pools separate "protects state employees from cost increases," Harlan said. But, he said, companies are not likely to bid artificially high for the business pool because "they can't afford to walk away from that mass of people."

Businesses would be required to provide demographic - though not actuarial - information on their employees to keep the insurance companies from bidding blindly, Harlan said.

The business pool would have the opportunity to spin off into its own pool separate from Missouri Consolidated should it gather enough numbers.

Harlan expects the strongest opposition to come from the insurance companies. "It's difficult to see how they would be for it - it's creating a pool to bid more efficiently for their services."