Lawmakers shelve health-insurance plan

PROVIDENCE - The General Assembly has abandoned, at least for this year, its plan to subsidize health insurance for small businesses through taxing insurers.

The plan to create low-cost health-insurance options for small businesses will still move forward, but the premium subsidies for low-wage firms would be contingent on finding a financing source within the next year.

Sen. Elizabeth H. Roberts, one of the architects of the health-insurance legislation package, said lawmakers scrapped the tax proposal after the insurers' testimony earlier this week that they would be forced to pass the cost along to subscribers by raising premiums.

"Our goal here is to help small business," Roberts, D-Cranston, said. "We wanted to make sure we did not, with the best of intentions, hurt small business instead."

Christopher F. Koller, the state's health-insurance commissioner, testified that he would be able to prevent insurers from passing the tax along to subscribers because he must approve premiums in the regulatory process. Still, Roberts said, "there was a concern that it would have ended up being an added expense for employers."

The Senate Committee on Health and Human Services approved a bill that would entitle businesses to a 10-percent discount on premiums if they pay an average wage in the bottom 25 percent of Rhode Island employers -- less than about $22,000 a year.

Under the same bill, the state would reimburse reinsurers for part or all of the money they lose by offering the reduced premiums. Both the reduced premiums and the reimbursement rely on finding a financing source, something Roberts says she's confident lawmakers can do by the effective date of July 1, 2007.

Roberts said the Joint Legislative Committee on Health Care Oversight, which she co-chairs, would bring together interested parties to brainstorm. "Many states use tobacco tax money to fund health programs," Roberts said. "The business community may have some ideas that have not occurred to us."

Rep. Brian Patrick Kennedy, chairman of the House Corporations Committee, which heard the health-insurance bills on the House side, said he's not convinced taxing insurers to pay for the program is a bad idea. He said his committee held that bill because the health-insurance package was posted for the first time last week, and the Assembly may adjourn tomorrow.

"It's just too hurried of a process," Kennedy, D-Hopkinton, said. "If this is a good-enough idea, we can come back and address it in the next legislative session."

Koller said the vote to hold the funding bill by no means signifies defeat for the health-insurance package, given that five of the seven bills are moving to the House and Senate floors, and the sixth is scheduled for a vote in House Corporations today.

"The reforms passed today are an important first step in the process," Koller said after the House committee vote yesterday.

One of the five bills moving forward will instruct Koller to begin developing a "wellness benefit plan" -- a lower-cost option that focuses on preventive care and aims to keep deductibles low without drastically limiting what's covered -- in conjunction with health insurers. That process "will create new options for small businesses" and for individuals who can't get insurance through an employer, Koller said.

The full House and Senate will vote on one of the highest priorities for Koller and Governor Carcieri -- a bill to reveal to consumers what hospitals and doctors charge for various procedures and services, as well as information on the quality of those procedures and services.

Other bills geared for passage would extend family coverage to dependent children up to age 25 if they are part-time students, and would create commissions to study Massachusetts' move toward universal health care and to look into pursuing federal financing for creating a pool of people with unusually high health risks and insuring them separately.

The bill to extend reduced premiums to low-wage firms may still be in jeopardy, even with the new language making it contingent on financing. Kennedy's committee held it for a vote today; Kennedy said he would meet with House Majority Leader Gordon D. Fox, D-Providence, and House Finance Committee Chairman Steven M. Costantino, D-Providence, before this afternoon's hearing to determine whether that bill moves forward.

"Some would say a hollow victory is better than no victory at all," Kennedy said. "I'm not comfortable, at this point, saying we should pass a bill if we don't have a revenue stream."