Blunt embraces health plan for state's small businesses

JEFFERSON CITY, Mo. -- Gov. Matt Blunt embraced a proposal Thursday to create a quasi-governmental agency to administer private health insurance plans for small-business employees -- a move intended to reduce the number of Missourians without health insurance.

Under the proposal, businesses would make payments toward a health insurance plan administered by the state-created entity on behalf of their employees. The workers also would pay a share of the premiums for the private health insurance plan of their choice.

"This is a very serious and innovative proposal that will expand access to health care for Missourians," Blunt said at a Capitol news conference.

Health insurers urged caution, however, encouraging the concept but expressing concern about the details and the potential effect on the existing private health insurance market.

The legislation is sponsored by Rep. Doug Ervin, R-Kearney, chairman of the House Small Business Committee. Besides Blunt's support, the bill also has the backing of Republican House and Senate leaders and is co-sponsored by 58 of Ervin's 162 House colleagues.

An estimated 700,000 Missourians lack health insurance. A preliminary report recently prepared for Blunt's administration estimated that 300,000 people -- almost half of Missouri's total small-business employees -- work at a firm that does not offer health insurance and probably has not done so in the recent past.

Ervin's proposal would allow businesses to pay money into a tax-free health care account for their employees. The intent is to put workers at small businesses on par with those at other firms that already make pretax paycheck deductions for private health insurance premiums.

Although it's not in the bill now, Ervin and Blunt said the legislation could be expanded to allow the government to subsidize the premiums of low-income workers who participate in the new program. Blunt previously proposed to spend $20 million in state funds on the subsidies, which could attract additional federal money through the Medicaid program.

Ervin's proposal also is intended to allow workers to take their health insurance with them if they switch from one small business to another that also participates in the state-administered program.

"We are fundamentally changing the way that we think about health insurance, especially for people who work for small businesses," Ervin said. "When we start moving away from employer-based health care, that is a pretty radical shift from where we are today."

The bill would let the governor establish a not-for-profit corporation named the "Missouri Health Insurance Exchange," overseen by a nine-person board, to administer the health care plan.

But Ervin acknowledged the plan needs more work.

Calvin Call, executive director of the Missouri Insurance Coalition, said the legislation as currently written will not work.

"Their goals are admirable," Call said. But "my major concern is the (effect on the) market that's already being served adequately out there" by private health insurance providers.

Call also questioned how the plan would directly help those who are uninsured.

Ervin said he hoped that, because of the new option, more small businesses would pay money toward employee health care plans. He hopes the proposal can lead to a 20 percent reduction in the number of uninsured.

The National Federation of Independent Business was among those praising the legislation. It said small businesses have endured a "crush of double-digit health insurance premiums for over a decade." As a result, some have asked their employees to pay a greater portion of their health insurance premiums.

The legislation should give employees more health insurance choices, which should help hold down the growth of premiums, said NFIB's state director, Brad Jones.

"This is a free-market approach to health insurance buying that will have a positive impact on employers, employees and the insurance industry," Jones said.