Two area state legislators are planning to introduce bills in the next few weeks that would help control skyrocketing health care costs for small businesses and their workers.
I’ve written recently about the lack of checks on insurance companies when it comes to setting rates for smaller employers, many of whom face outrageous annual increases in health insurance premiums. In many cases, those costs have been passed on to workers, who are seeing more of their paycheck going toward health coverage for their families.
State Sen. Rob Wonderling, R-24th Dist., and state Rep. Curt Schroder, R-155th Dist., plan to re-introduce legislation in their respective chambers to address the problem. Wonderling was the primary sponsor of similar legislation in the 2003-04 session, but the bill never made it out of the Senate’s Insurance Committee. A parallel bill introduced in the House also got bogged down in committee.
Meanwhile, small business owners and their employees have suffered double-digit increases — in some cases as high as 25 to 35 percent — to pay for health insurance coverage. Some companies have dropped health insurance for their workers. Others won’t hire new workers because they can’t afford to pay the health premiums.
Although Wonderling and Schroder have worked hard to get dozens of fellow legislators to co-sponsor the bills, there’s no guarantee the legislation will not suffer the same fate it did in the last session. That’s where you and I come in. We have to make sure that our state senators and representatives know we’re watching these bills closely and expect to see them passed and eventually signed by Gov. Ed Rendell.
It’s imperative that everyone call, write or e-mail their elected representatives in Harrisburg to demand these bills don’t end up at the bottom of a pile on somebody’s desk or slip between the cracks.
Wonderling is a fresh face on the Harrisburg scene, first elected to the Senate in November 2002, but he’s risen quickly through the ranks to become chairman of the Senate’s Communications and Technology Committee. He’s sponsored several key bills in the short time he’s been in office and continues to work for his constituents and all Pennsylvanians. He’s been talking up Senate Bill 671 to his colleagues during the current session.
"I’m very pleased by the level of support from my fellow senators," Wonderling said. "The bill has co-sponsors from every geographic region in Pennsylvania and every ideological philosophy is represented — from liberal to conservative."
In addition to contacting our state representatives as individual voters, we must also get organizations such as the chamber of commerce and other business groups to lobby Harrisburg for passage of these reforms. Local government also needs to get behind this bill. Fewer jobs means less tax revenue for municipal coffers.
While Wonderling was disappointed that the insurance reform bill didn’t pass in the last session, he hasn’t given up hope. "Many concepts that challenge the status quo take time for people to hear about them, think them through and finally become comfortable with them becoming reality," Wonderling said. "I am overwhelmed by the number of people who have contacted my office to encourage me to keep fighting to bring down the high cost of health insurance."
Every state in the country — except Pennsylvania — sets some standards in their small group insurance rates, according to Wonderling. "Since Pennsylvania’s rate of uninsured is increasing, it’s time to take action and implement standards that any insurer in the small group market will have to meet. This will make health insurance more available to small groups in Pennsylvania."
The problem with the existing system is that big insurance companies can set rates for businesses based solely on the type of workers in the firm. It’s called "demographic rating." That means that a company with a lot of female employees or older male workers will get hammered with high premiums.
If this sounds like government-sanctioned discrimination, that’s exactly what it is. Left unchecked, about the only businesses that insurance companies will cover will be landscaping firms, which tend to hire young, healthy men.
The proposed legislation would require insurance companies doing business in Pennsylvania to use a "modified demographic" rating to determine premiums for smaller firms and their workers. "Modified demographic" rating will include the following factors: age, gender, family composition, industry and geographic area.
"This will permit a better balancing between risk groups," Wonderling said. "Which is what insurance really does — balance risk. Additionally, modified demographic rating does not advantage either small or large insurance companies in a given market. Uniform rating rules will help to level the playing field for everyone. In addition, the new rating system in the bill also encourages existing carriers to remain in the market and new carriers to come to Pennsylvania to set up shop."
E-mail Tony Phyrillas at tphyrillas@pottsmerc.com
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