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GOP, Democrats compare ideas for small business health care

January 13, 1999
By: David Grebe
State Capital Bureau

JEFFERSON CITY - A special committee investigating health care for small business employees will not make a specific legislative recommendation, the Columbia Missourian has learned.

The committee is chaired by Rep. Tim Harlan, D-Columbia, who sponsored legislation last year to let small businesses join a the health-care plan that covers state workers.

The committee is expected to issue its report today.

Rather than a specific recommendation, a draft report by the committee simply lists several "possible solutions."

Among the possibilities is Harlan's 1998 proposal to allow small businesses to join the state's Consolidated Health Care Plan. But like last year, that idea has encountered stiff opposition from lawmakers who argue it could drive up costs for the state's system.

"The consolidated health bill is politically dead," proclaimed Rep. Jon Dolan, R-St. Charles County.

Harlan said his new bill likely will include elements -- expanding the state's high-risk pool, and what is known as "rate-band compression."

Rate band compression, Harlan said, is designed to lower rates for a small minority that is paying high rates, and raise them somewhat for those in lower rate bands. "We've been working with the insurance companies to see how this could be done," Harlan said.

Expanding the high-risk pool (now covering just 900 Missourians) would make employees eligible for lower rates, and allows companies to deduct the cost of insurance from their taxes.

"Expanding the high-risk pool does involve some element of government subsidy," Harlan said.

The idea of expanding the government's role in health care has drawn fire from some Republicans.

Last week, House Republicans announced that health care for small business workers would be a legislative priority. However, House Republican Leader Delbert Scott said that a larger government was not an acceptable solution.

Harlan said it was unhelpful to approach this discussion while making demands. "I've never had a Democratic position on this issue," Harlan said. "I'm willing to work with any Republican that wants to be part of this process."

But Dolan says the House Republicans are also looking at rate band compression and expanding the high-risk pool.

"In 1999, a small-group business reform bill can do a lot of good without being expensive," Dolan said.

Dolan said the Republicans are willing to compromise, and are willing to support tax-credit subsidies for companies who cover those in the high-risk pool. "We're proud of that subsidy," Dolan said.

Dolan also proposes full deductibility for health insurance premiums for those who provide coverage for small or high-risk groups, and Rep. David Levin, R-St. Louis County, has proposed making individual out-of-pocket medical expenses deductible as well.

Other elements in the GOP plan include expanding the ability to form Health Insurance Purchasing Cooperatives (HIPCS). HIPCS will allow small groups to band together to obtain cheaper coverage.

The House Republicans also propose to create an oversight committee that will measure the effectiveness of mandates issued by the Department of Insurance.