When Colorado House Bill 1355 passed last year, we knew that while the intentions for the bill were good, the result would likely be a rate hike for most small businesses. At the Colorado Health Insurance Insider, our focus is almost entirely individual health insurance. But we do have a handful of small group clients, and we were concerned about how HB1355 would impact them.
As we mentioned last month, Anthem Blue Cross Blue Shield is allowing small businesses in Colorado to change their renewal date to November or December, in order to lock in premium discounts for another year. For groups who currently have a discount based on health status and claims history, this allowance from Anthem will postpone the inevitable rate increase until the end of 2009.
Anthem sent us a list of the small groups we have with them, along with the current rating adjustments so that we can determine whether a renewal date change would be helpful. We focus on individual/family coverage, but we have four business groups with Anthem coverage, all small businesses (the largest has 15 employees). One group has a rating of 1 – meaning no discount, but also no health-based premium increase. The other three groups have ratings ranging from 0.75 (a 25% discount) to 0.95 (a 5% discount). Not one of our groups has an increased rate based on health status. And these are just normal people – not superhumans with perfect health and no claims history.
Unfortunately, three of our four groups will suffer as a result of HB1355 – and the fourth group won’t gain anything. These are small businesses, struggling to provide health insurance to a handful of Colorado families. When your health insurance premiums are several thousand dollars a month, losing a 25% discount is painful.
Obviously the intent of HB1355 was to level the playing field, and make sure that groups with significant health issues didn’t end up with increased premiums as a result. (It’s important to note here that the maximum health history rate increase for small groups in Colorado was 10%. We have worked in other states besides Colorado, and I’ve seen small group health insurance premiums increased by up to 67% during underwriting, so Colorado already had a good system for protecting groups with significant claims history) But the bill prohibits any type of rating based on health history of a group. And unfortunately the majority of groups were impacted in a good way – with a discount – by the rating system that will be going away at the end of the year. So while I’m sure the businesses that had been paying an increased rate for their health insurance will be grateful to see the implementation of HB1355, there are four Colorado businesses that I know will not benefit at all, and will actually see significantly higher health insurance premiums next year.
