Small employers say one of their biggest concerns is the double-digit increase in the cost of providing health insurance for their employees. Although a bi-partisan group worked to resolve this issue during the 2006 legislative session, a law was never passed. Over the interim, the Association of Business and Industry (ABI) worked with the insurance industry to craft compromise language. The result legislation passed the Iowa House this past week.
Iowa already allows many different types of group insurance plans; HF 790 would add association health plans within the framework of small group coverage. Any trade, industry or professional association organized as a non-profit corporation under Iowa Code Chapter 504 would be considered a bona fide association and could seek coverage. The participating employers in the plan must employ between two and 50 full-time employees. The plan would have to be offered to all eligible employees, spouses and dependents of the group who wish to participate in the coverage and must not condition group membership on the health status of their employees, their spouses or dependents.
One of the most significant provisions in this legislation would allow a small group carrier to transfer a small employer to a lower cost class of business due to a favorable claims experience, the implementation of a managed care or wellness program, or the improved health status of the participants since the issuance of the plan.
Another provision in the bill would allow the small group carrier to offer premium credits or discounts to small employers who choose to participate in wellness or disease management programs. Employers would be given the option of passing these credits along to their employees. Additionally, the bill would lift the restrictions on insurance carriers’ ability to pass along savings due to health promotion efforts.
Compared to other states, a high percentage of Iowans are covered by some sort of health insurance, but there are many who are not. The intention of the proposed legislation is to offer small employers an additional way to provide health insurance for their employees and through incentives help control costs.
The issue of health care is complex, and this legislation is certainly no silver bullet to address all the concerns in rising costs of health insurance. However, in a year where the Iowa Legislature has shown little ability to work in a bi-partisan fashion, I was encouraged to be able to vote with the majority party for legislation that will bring a positive change to Iowa.
As the legislative session passes its midway point, passage of the budget bills will become the focus.
Now that the cigarette tax increase has been signed by Governor Culver, the majority party has finally released the rest of the budget targets. The proposed budget indicates a budget increase of well over 10%.
Other smoke-and-mirror tactics being employed will cause the spending increase to be even larger and create great difficulties in next year’s budget. The balance sheet also indicates the revenue from the cigarette tax increase—although touted to be designated for health care--is deposited directly into the general fund for new spending programs.
The majority party also admitted they do not plan to increase funding for Medicaid providers, despite the providers’ lone request that the Medicaid rates be raised to Medicare levels. In 2005 and 2006, on the other hand, the Republican majority gave providers a three percent increase. The majority party’s decision not to increase funding results in hospitals, doctors and other medical professionals being unable to provide health care to low-income people because the reimbursement from the state and federal government is not enough to subsidize their services to poor people. Instead, the majority party instead plans to raise the Medicaid income threshold which would allow more people to be eligible for Medicaid benefits. This policy decision means that while more people are now eligible for subsidized health services, there are fewer doctors to provide the services needed. No increase to Medicaid providers also results in their inability to raise salaries for their nurses and other staff. Iowa has focused on raising teacher salaries, and it is a little known fact Iowa is dead last in the nation in nurses’ salaries.
Please feel free to contact me in any of the following ways:
E-mail: carmine.boal@legis.state.ia.us
Home Address: 3301 SW Timber Green Road, Ankeny
Home Phone: 964-3335