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House Bill Helps Form Private Insurance Pool
HB 315 Would Offer Coverage to Small Businesses and Nonprofits

(JUNEAU) - Small businesses and non-profits facing rising costs and decreasing availability of health insurance would get state assistance in forming a pool to provide coverage for their employees, under House Bill 315, which passed the House today.

Sponsored by Rep. Norman Rokeberg (R-Anchorage), HB 315 seeks to help the state attract private insurers to cover more of the estimated 116,000 Alaskans, or 19 percent of the state residents, lacking health insurance, he said. The national average uninsured rate is about 14 percent.

"While the skyrocketing insurance costs of the 1990s were mitigated by health maintenance organizations, preferred provider networks and other innovations, we are again seeing steep increases in health insurance costs," Rokeberg said. "HB 315 is an effort to get these people together so they can get the private insurance they need, at a more affordable cost."

The health insurance crisis in Alaska is growing, with estimates showing that just 35 percent of Alaska businesses offer insurance, compared to the national average of 60 percent, Rokeberg said. He also noted that Blue Cross, which has 52 percent of the private health insurance business in Alaska, plans to increase its rates by 20 percent this year.

Under the bill, the state would first survey small businesses and non-profit agencies to see what kind of insurance policies they need, and then invite private insurers to bid on providing that service. The services might include a basic high-deductible policy that would provide protection against catastrophic health problems at an affordable level, he said.

The bill doesn't mean state entry into the insurance business, and will in fact result in no net cost to the state. The Mental Health Trust Fund has offered $90,000 to cover start up costs for the effort, and another $42,000 in state expenses would be covered by a slight surcharge on the policies for the first five years.

The pool would include small businesses with from two to 50 employees, non-profits, small associations for insurance purposes and special service organizations such as sole proprietorships providing in child care, foster care or assisted living services.

"House Bill 315 will not solve all the problems and many may still not be able to afford insurance," Rokeberg said. "However, I hope that pooling a large group of individuals can spread the risks over more people, and lower the premiums, so these groups will have choices and a stable source of insurance coverage."

HB 315 moves next to the Senate for consideration.

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