Health Care and Insurance and Small Business

Bill keeps mandate debate swirling: Biz community favors stripped-down option

February 28, 2005

Small-business owner Gail Piltz, who is paying 31 percent more this year than he did a year ago to insure himself and his four employees, has a somewhat radical philosophy regarding health care insurance.

His suggestion: Everyone should be responsible for his or her own health care plan, just like they are with their automobile and homeowner's insurance. That way, he said, people might abuse the system less and make coverage more affordable.

Piltz's proposition has failed to gain traction at the federal or state level, amid the slew of proposals being bandied about by lawmakers convinced the industry needs fixing.

Here in Indiana, one option that has universal support from the small-business community is a bill allowing insurers to provide policies without complying with all of the state's 19 health-benefit mandates. Small-business owners back the measure because they're less able to absorb the costs of rising premiums that have coincided with more mandates.

Supporters argue that a 50-year-old worker, for instance, should not be forced to pay for a policy that includes mandated coverage for childbirth or for autism testing.

"We don't need a lot of the frills," said Piltz, owner of the locally based Comprehensive Accounting Services. "To have the option to select the coverage you want instead of what the Legislature thinks you should have, I think that's good."

Sen. Patricia Miller, R-Indianapolis, and Rep. Robert Behning, R-Indianapolis, introduced identical bills addressing the mandate issue. Neither of the versions had been voted on in their respective committees as of IBJ's deadline, and their chances of advancing were predicted to be slim. Bills had to be out of committee by Feb. 24.

Before the cutoff, Miller was less than optimistic that her legislation would pass out of committee. Lobbyists who support her bill say legislators are leery of stripping the mandates they fought hard through the years to include in coverage.

The debate over mandates also surfaced during last year's legislative session. Although the proposal died, the Senate Health Committee commissioned a task force to research the health insurance benefits Indiana requires and determine whether they are all necessary.

The Mandate Review Task Force, a ninemember group made up of insurers, health care providers, employers and Department of Insurance officials, presented a vague report to legislators Dec. 31.

The group continues to meet after getting off to a rocky start, however, as members struggled to decide which mandate to tackle first. Miller said questions still remain over which mandates would be affected and what type of premium reductions would be offered.

Parents of children with autism strongly oppose the bills. Autism is one of the mandates that could be removed if an employer chooses. Susan Gray, coordinator of the Bloomington-based Autism Society of Indiana, wondered if autism coverage could be excluded, would diabetes treatments be next?

"We would prefer that an insurance company cover whatever conditions or illnesses a member would have," Gray said. "The disability community is facing a major number of issues this legislative session, and this is one of them."

Supporters, though, point out that the law would apply only to small businesses with fewer than 50 employees, and individuals, who would benefit most from lower insurance costs. In many instances, the option to exclude certain mandates gives smaller companies that don't provide coverage an opportunity to afford insurance, Miller said.

"The purpose is to try to help people who have no health insurance to get insurance," she said. The employer or the individual would choose which mandates to exclude. It's just one more option."

Coverage for birth, diabetes and prostate, breast and colon cancer screenings are among the mandates that could not be dropped.

Regardless of the bills' status this year, the measures likely will continue to resurface in future legislative sessions. Probusiness groups such as the National Federation of Independent Business, the Indiana Chamber of Commerce and the Greater Indianapolis Chamber of Commerce, and even the Insurance Institute of Indiana, back the changes.

The expense that accompanies the mandates hurts business owners, not the insurance companies, institute spokesman Marty Wood said.

"For quite a long time, we were against them because of the effect they would have on businesses in the long run," he said. "We pulled off that and told businesses, 'You're the ones being affected; you need to start stepping it up.'"

But Gray of the Autism Society said insurance companies view the mandates as costly. She further argued that employees who might be affected by a dropped mandate probably wouldn't quit their jobs for another because then their new insurance company could view their condition as pre-existing and deny coverage.

Theresa Jolivette, director of health care policy for the state chamber, whose majority of members are small businesses, hopes her members will someday have the choice of offering a stripped-down insurance policy.

"Either they have to take the Cadillac plan or nothing," she said of the current situation. "We support the bill and we're going to continue the work to help ensure its passage."

Gov. Mitch Daniels campaigned on his support of giving employers the option of offering a basic insurance plan, exempt from some state mandates. Daniels thinks less expensive health care will act as an economic driver to help attract more businesses to the state.

Meanwhile, after Piltz's insurance carrier informed him his insurance costs would spike 31 percent this year, he began shopping around for a better deal. In comparing various policies, however, he quickly realized he'd have to stomach the steep increase.
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