PLAN OPENS STATE INSURANCE; STATE HEALTH-CARE FOR SMALL BUSINESS PROPOSED

Small businesses would be able to purchase health-care coverage through the state's health-care plan under a House bill.

State Rep. Tim Harlan, D-Columbia, has proposed legislation that would allow businesses with up to 50 employees to purchase private health insurance through the Missouri Consolidated Health Care Plan.

The plan serves 136,000 state workers and other public employees.

"What this bill does is allow small business to use the same purchasing mechanism that big business and big government uses, which is to purchase health care at a large volume, at a discount," Harlan said.

"This would cover farmers, which we think is an important part of the bill, because farmers find it almost impossible to find health insurance because they have so few employees and they have high-risk jobs," he said.

A number of lawmakers signed onto the bill, including Rep. Mary Kasten, R-Cape Girardeau. But on Wednesday Kasten withdrew her support after talking to officials with the Missouri Chamber of Commerce and Associated Industries of Missouri. She said she wanted time to explore the issue more.

"I have learned there are some options out there that I was not aware of for small businesses," Kasten said.

She said one alternative would be to allow small businesses to receive tax credits or deductions for health insurance expenses. The Missouri Chamber of Commerce favors that approach.

Kasten worried that Harlan's bill expands the role of state government in providing health-care coverage.

"We need to look at the whole issue and make it easier for people to be able to afford some insurance in the private sector where it doesn't become a totally state function," she said.

Under Harlan's bill, a separate trust account would be set up for coverage for private employees. It would be up to the state board that governs Consolidated Health Care to establish procedures for health-care coverage. If enacted, the measure would become effective Jan. 1, 2000.

Harlan said associations that sell insurance to their members, such as Farm Bureau, Missouri Chamber of Commerce and Associated Industries of Missouri, likely would oppose the bill.

The state chamber's Dan Mehan said his organization opposes the bill on principle. "We support a private-sector solution; we don't think increasing government's role is the only answer," said Mehan.

Mehan is vice president of government affairs for the state chamber.

He said Missouri Consolidated is a government-based, taxpayer-financed solution to managed care.

Mehan said opening up the state insurance plan to private employers and employees ultimately could lead to fewer health insurance companies providing coverage. Less competition could mean higher insurance rates, he said.

He said that situation has occurred in some areas of the nation.

Consolidated Health Care Plan is overseen by an 11-member board whose members all have ties to state government. Six of the members are appointed by the governor, three are state department heads and two are lawmakers.

Ron Meyer, its executive director, said the insurance contracts are annual. The current contracts apply solely to insurance for public employees, he said.

The contracts would have to be revised to add private employees to the plan, he said.

Meyer said opening the plan to private employers could help secure better insurance prices because the risk could be spread over more people.

Meyer said the Consolidated board hasn't taken a formal position on Harlan's bill.

A spokesman for Blue Cross Blue Shield in St. Louis declined to comment, saying company officials had yet to thoroughly analyze the bill. Clara Webb Kinner, vice president of corporate communications, said legislation often has broad language that only later is defined by rules and regulations.

"The devil is in the details," she said.