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BUSINESSNew Hampshire bill aims to attract more health plansProponents say the legislation will lead to increased competition and lower premiums; opponents worry about cherry-picking and higher costs.By Robert Kazel, AMNews staff. June 23, 2003. With the recent passage of a bill intended to make it easier for health plans to set up shop in its state, New Hampshire hopes to open up a marketplace now dominated by a very short list of insurers -- a situation similar to most other parts of the country -- thereby slowing down the pace of premium increases. But the bill's opponents, including consumer groups and an insurer already in the marketplace, say premiums may increase just as quickly. They say the bill, which allows insurers to adjust premiums based on variables they previously weren't allowed to take into account, will allow plans to "cherry-pick" the healthiest customers, or stick employers in high-risk industries with even greater insurance costs. The New Hampshire bill would allow insurers selling to companies of 50 employees or fewer to factor in such variables as type of industry, geographic location, and the group's size and health status in setting rates. Right now, New Hampshire is one of the few states to require a community rating system, in which payers must use a single rate that averages out anticipated claims throughout the whole state, regardless of any variables from business to business. The bill moved out of the state's Legislature on June 3. Gov. Craig Benson, who supported it publicly, is expected to sign it. Before the community rating system was passed in 1994, 29 companies sold health insurance in the state. The market has since shrunk to three players. Anthem, CIGNA Corp., and Harvard Pilgrim Healthcare are virtually the only companies pursuing new customers. Other insurers that pulled out of the market objected to the community rating system, saying it made the insurance business much less profitable for them and that there is less incentive to sell policies. [...]Full text of AMNews content is available to AMA members and paid subscribers.
Copyright 2003 American Medical Association. All rights reserved.
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