THE PUBLIC MIND: LEGISLATION COULD MAKE INSURANCE RATES CLIME DRAMATICALLY

Open Letter to Business People:

There is a campaign going on in Jefferson City that has become a war of small businessmen like you against the state politicians. I'm asking you to take action now, before we lose this war. Here's what's going on:

Four bills (SB 754, SB 796, HB 1438, and HB 1506) have been introduced by well-meaning, but misinformed individuals. They contain fatal flaws which will radically raise the cost of your health insurance and the costs of other employers throughout Missouri.

Each of these bills requires that insurers sell "guaranteed issue" health policies. Guaranteed issue will guarantee that your rates will skyrocket!

The small firms that already have group health insurance will suffer the most from this kind of bad thinking. Here's what will happen in the Missouri marketplace if guaranteed issue becomes law:

1. Businesses will choose not to spend money on health insurance premiums until one of the employees becomes seriously ill. Sick people will be guaranteed acceptance. This is like selling fire insurance to a homeowner whose porch is on fire!

2. When many employers "go bare" (uninsured) until someone in their firm gets sick or hurt, the insurance companies are forced to raise rates for everyone who has small group insurance.

3. Forbes magazine, in an April, 1991, editorial referring to this kind of small business health insurance legislation said:

Typically, a business employing, say, 20 reasonable healthy workers, could find an extra $12,000 a year tacked onto a $60,000-a-year health insurance bill.

An actuarial study done for the Ohio State Senate, which is looking at similar bills, confirmed Forbes' estimates. Furthermore, the increases in premiums would be about $153-$250 million for existing Missouri group insurance customers to subsidize these "late buyers" who choose to "select against the insurance mechanism."

You probably have close, personal friends in the Missouri legislature. At the very least, you are a voter. This means you have the power to set things straight with them by contacting your state representative and state senator. Make an appointment with him or her at home in the district, if possible. Let them know you are opposed to the "guaranteed issue" portions of the pending bills. Let them know why you are opposed.

In closing, I just want to say that the facts are on our side. Now, let's work together to get state government on our side, too.

Robert T. Krone Jr.

Cape Girardeau