Lessons From New Hampshire: Senate Health Bill Could Drive Up Health Insurance Premiums for Many Small Businesses
End Notes
[1] Mary Beth Senkewicz, “Senate Health Bill Would Preempt States’ Small Group Rating Rules,” Center on Budget and Policy Priorities, April 26, 2006. See also Mila Kofman and Karen Pollitz, “Health Insurance Regulation by States and the Federal Government: A Review of Current Approaches and Proposals for Change,” Georgetown Health Policy Institute, April 2006.
[2] Under the New Hampshire “adjusted community rating system,” insurers were prohibited from varying small business premiums based on workers’ health status, but insurers were allowed to only vary premiums to a limited extent based on the age of employees and firm size.
[3] See New Hampshire Department of Insurance, "The Small Group Health Insurance Market," February 16, 2005.
[4] New Hampshire Department of Insurance, “Special Data Request to Carriers,” February 2005. These data played a significant role in persuading state policymakers to repeal the 2003 law and reinstate adjusted community rating. Because most states do not consider an individual as a “small group” as New Hampshire does, this paper does not analyze the premium data related to employers with only one worker.
[5] The New Hampshire Department of Insurance does not have comparable data for 2003 but it is clear that it was the change in rating rules, rather than health inflation, that primarily drove these large premium increases in 2004. See, for example, Letter from David Sky, Life, Accident and Health Actuary, New Hampshire Department of Insurance, to a Small Business, October 15, 2004 (finding that in the absence of the change in rating rules, a particular small business’ health insurance premiums would have risen only 13 percent in 2004 rather than 48 percent).
[6] The state of Minnesota had an experience similar to New Hampshire when it phased out community rating and instituted less restrictive small group rating rules over a number of years starting in 2001. See Deborah Chollet, “State Regulation and Initiatives to Expand Small Group Coverage,” Written Testimony before the Senate Finance Committee, April 6, 2006.
[7] See Letter from Kevin M. McCarty, Florida Insurance Commissioner, to the Honorable Michael Enzi, March 7, 2006; Letter from Mike Kreidler, State Insurance Commissioner of Washington to the Honorable Patty Murray, March 6, 2006; Letter from John Garamendi, California Insurance Commissioner to the Honorable Michael Enzi, March 7, 2006; Letter from Howard Mills, Superintendent of Insurance, State of New York, to the Honorable John M. McHugh, March 17, 2006; Letter from John P. Crowley, Vermont Insurance Commissioner to the Honorable James Jeffords, March 27, 2006; Letter from Jorge Gomez, Commissioner of Insurance, State of Wisconsin, to the Honorable Michael Enzi, March 14, 2006; Letter from Christopher Keller, Health Insurance Commissioner, State of Rhode Island, to the Honorable Michael Enzi and the Honorable Edward Kennedy, March 13, 2006; Letter from Susan Voss, Commissioner of Insurance, State of Iowa, to the Honorable Charles Grassley and the Honorable Tom Harkin, March 15, 2006; Letter from James Donelon, Louisiana Insurance Commissioner to the Honorable Michael Enzi, April 18, 2006 and Letter from Matthew Denn, Delaware Insurance Commissioner, to the Honorable Joseph Biden and the Honorable Thomas Carper, April 21, 2006. See also Letter from the National Association of Insurance Commissioners to the Honorable Michael Enzi and the Honorable Ben Nelson, March 7, 2006.