Small shops look for health insurance aid

By JOSH FLORY of the Tribune’s staff

Published Sunday, January 29, 2006

Row after row of bicycles, implements of workout equipment and athletic apparel radiate a sense of good health inside the Tryathletics store on Chapel Hill Road.

One thing is missing, though. Shop owner Steve Stonecipher-Fisher said he can’t afford to offer health insurance to the mostly college-age employees who work at his store.
A fifth-place finisher in the 1983 Boston Marathon, Stonecipher-Fisher said most employees only work at the store three to five years.

"Part of the reason they move on is I can’t offer affordable health care," he added.

State and federal lawmakers are working feverishly to address the concerns of entrepreneurs like Stonecipher-Fisher, and they’re increasingly focused on one idea in particular: encouraging small businesses to band together when buying insurance.

U.S. Sen. Jim Talent has long been an advocate of the idea and visited Tryathletics on Tuesday to stump for a federal measure that would allow small businesses to buy health insurance through national trade associations such as the Chamber of Commerce.

Missouri Gov. Matt Blunt called for "buying pools" in his recent State of the State speech, and the idea has attracted legislative proposals from both sides of the aisle.

The theory is simple:

If a business has eight employees and one of them has a serious health problem, insurance premiums for that company will probably be sky-high.

But if the company can buy insurance as part of a large association or buying pool, the impact of one employee’s sickness should have little effect on that company’s premiums.

Talent cited the example of a Farmington optometry office, where one of the employees was a breast cancer survivor. The other employees, he said, voluntarily gave up raises for several years to cover the increased health insurance costs for their colleague.

"Those are the kind of people who will go into an association health plan," he said.

At the federal level, critics have complained because the association health plans, or AHPs, favored by Talent and President George W. Bush would be regulated by the federal Department of Labor rather than by the states and would be exempt from state coverage mandates.

A Georgetown University study issued last year said that structure would "have the unintended consequence of widespread fraud threatening the coverage and financial security of millions of Americans."

But Rich Chrismer, a spokesman for Talent, countered by noting that large corporations, unions and federal employees already belong to large national pools and said this would simply extend that right to small businesses.

As for the fact that state coverage mandates wouldn’t apply, Chrismer said those mandates "are not helpful to you if you don’t have health insurance in the first place."

That’s not the only criticism. Protect Your Health Care, a coalition of AHP opponents, has argued that the cooperatives would be able to "cherry pick," or structure their plans to attract younger, healthier groups of patients.

Talent made the opposite argument Tuesday, saying small businesses that have trouble gaining coverage - possibly because of employees with a history of medical illnesses - would rush to join AHPs.

"We want people like that part of a big … pool because they can absorb those costs so much easier," he said.

In Missouri, state law prohibits businesses or individuals from joining an association that has no other purpose than providing health insurance. Some lawmakers are aiming to change that, however, including Sen. Harry Kennedy, a St. Louis Democrat.

Kennedy’s bill would allow the creation of a "small-employer purchasing alliance," in which a not-for-profit would purchase and administer insurance on behalf of groups of employers. The bill would prohibit the alliances from excluding members on the basis of health risk.

Kennedy said small businesses in his district keep raising the issue of health insurance with him.

"It’s too expensive," he said simply.

Kennedy also cited a recent project in southwest Missouri, where the state Department of Insurance indicated that it was willing to waive certain requirements for a group of manufacturers so they could band together to purchase insurance.

According to the state insurance department, the program has allowed six companies to offer insurance that previously were unable to do so.