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Lobbyist Money Help  

Insurance Bill Ensnared in Controversy

February 18, 1999
By: David Grebe
State Capital Bureau
Links: HB 718

JEFFERSON CITY - Last minute controversy has set back legislative efforts to expand health insurance options for small business - central campaign for Rep. Tim Harlan, D-Columbia.

The House Critical Committee put off until next week, at the earliest, a vote on Harlan's bill after members voiced objections to various provisions.

Efforts to lower the cost of health insurance for the employees of small business has a major issue for Harlan since last year.

In its latest form, his bill would establish purchasing cooperatives - to allow small businesses and self-employed people to join together to spread risk. It also would establish tax credits for health insurance expenses to help small businesses pay for health insurance.

But some Republicans balked at a requirement that would mandate insurance companies offer a policy to any self-employed worker who wanted one. An insurance company would prohibited from denying coverage for "pre-existing" conditions.

"People won't buy health insurance until they have a catastrophic illness - and one of the principles of insurance is that you need healthy people to balance out the risk," said Rep. Charlie Shields, R-St. Joseph.

Harlan said that some insurance companies primarily offer coverage to individuals. "And if you get sick they'll cancel the policy - or triple the premium," he added.

He said prospective buyers would only be able to pick up insurance during just one month of the year - unless they're completely healthy - in order to help keep healthy people in the system.

Lawmakers are face conflicting interests from business. Many small businesses seek more affordable insurance, while some large businesses - insurers - dislike aspects of Harlan's proposal.

Another aspect of Harlan's proposal - "modified community rating" of insurance risks - drew fire from some Republicans. This would limit the criteria companies can use to determine rates. Shields said this would drive average rates up. "Typically what happens is that you drive young people out of the market," he said.

"This is a Republican bill," said Rep. Jon Dolan, R-St. Charles County, pointing to tax credits - and the promise to review state regulations. "I'd hate to see this go down because of one objectionable thing."

"I'm sure he'll tell you he gave everybody advance warning about this - but we didn't have any idea about this 11th hour insertion of objectionable parts," Dolan said. "He precipitated this lobbyist riot when he included an individual guarantee in the bill."

"I spoke with him (Dolan) for and hour and a half Wednesday afternoon and he had no problem with it," Harlan said. "Something happened after that."

"If the people sitting behind me have veto power, we may not get very far," Harlan said on Thursday. Several insurance industry lobbyists sitting behind him had no observable reaction.