Senate OKs health insurance measure for small businesses

CONCORD — An attempt to reverse a controversial health insurance rating law inched closer to reality on Thursday.



Senators voted 15-9 to send a measure to the House which would limit increases in health insurance for small businesses to 20 percent a year. The bill (SB 125) makes major changes to the law known as Senate Bill 110. The law, which took effect last year, allows insurance companies to factor in age, medical history, type of business and geography when calculating rates.



Senators, backed by Gov. John Lynch, stripped health status and geography out of the rate-setting calculation. The legislation also creates a high-risk reinsurance pool for insurance companies to draw from for the most expensive cases.



Besides the 20 percent limit, other changes to the bill Thursday proposed by Sen. Ted Gatsas, R-Manchester, included restrictions on how much the rates can vary between businesses. Gatsas told his colleagues that the highest premium cannot be 3.5 times higher than the lowest.



“We now have a piece of legislation we can put forward,” Gatsas said.



Supporters of SB 110 said it would bring competition to the state and therefore lower premiums. However, many businesses, especially on the Seacoast, saw insurance costs skyrocket.



Still, supporters of the current law say it has not had enough time to work. “If we pass this legislation we will lose the competition we worked so hard to get,” said Sen. Robert Boyce, R-Alton.



But Boyce was in the minority. Many politicians, including the governor, campaigned on repealing SB 110 due to the cries of the small business community.



“This bill is a move forward,” said Sen. Maggie Hassan, D-Exeter. “This is a bill for true competitors.”



The House has already passed a similar measure, which removes health and geography from the rating calculation. It also establishes a reinsurance pool, but contains a lower cap on premiums.