Lawmakers consider bills designed to lower health insurance costs

PROVIDENCE, R.I. --Lawmakers are looking for ways to make insurance more affordable, as health insurance premiums for a family can cost as much as minimum-wage workers earn full-time in Rhode Island.

The Senate was scheduled to vote Wednesday on two of the seven bills included in the Rhode Island Health Care Affordability Act of 2006, and House and Senate committees are meeting to discuss the legislation.

The number of uninsured adults in Rhode Island nearly doubled from 6 percent in 2000 to 11 percent in 2004, according to the U.S. Census Bureau.

Minimum wage workers earn $7.10 per hour in Rhode Island, or a little more than $14,000 per year. That's about the cost for health insurance premiums for a family, according to a state-sponsored study done last year.

The study also found that as insurance costs rise, fewer companies are offering health plans for workers. Small companies and those that pay minimum or low wages are the least likely to offer health insurance benefits, the study found.

"The cost of insurance is going up significantly above the rate of inflation, and clearly above the rate of increase in wages, by a lot," said Sen. Elizabeth Roberts, who co-chairs the committee that put together the act. "And particularly for smaller employers, for employers who are low-wage employers, it has become such a burden."

The legislation is designed to help people who are self-employed or run small companies afford health insurance for themselves and their workers, she said. It also includes some measures to help people who buy their own insurance.

For example, many of the growing number of uninsured people are in their 20s, Roberts said. One bill in the package would try to address that problem by letting part-time students remain covered by their parents' insurance up to age 25. Full-time students are covered now.

Other bills would:

-- use taxes paid by insurance companies to subsidize health insurance for some low- and moderate-income workers and companies that pay low wages.

-- allow state Health Insurance Commissioner Christopher Koller to design a "wellness plan" that insurance companies would offer as a lower-cost alternative to standard health insurance plans.

Gov. Don Carcieri supports both of those proposals, said his spokesman, Jeff Neal.

The wellness plan could focus on preventative care and offer benefits such as discounts for health clubs, Roberts said. But it also could include managing chronic illnesses, such as diabetes, so patients don't require expensive hospital treatment.

Bethany Costello, spokeswoman for the Greater Providence Chamber of Commerce, said health insurance costs are the top concern for chamber members. There's interest in the bill that would subsidize insurance costs for low-wage companies and their workers, but the chamber disagrees with the plan to pay for it, she said.

The state would tax insurance companies on their administrative costs, which are typically 12 percent of their budget, and use that money for subsidies.

"We just don't want to see it balanced on the backs of our state's largest health care providers, who in turn would pass the cost on to policyholders," Costello said.

The fear is that companies already providing insurance to employees would see their premiums go up even more, she said. She did not offer an alternative means of paying for the plan, but said the chamber is open to other ideas.

Debora Spano, spokeswoman for United HealthCare of New England, said the subsidy would result in more expensive premiums as it passes the tax on to larger companies and their workers. United HealthCare would rather develop lower-cost insurance plans and could do so if it received a waiver on state requirements for such things as infertility and wheelchair coverage, she said.

"I'm not saying those things are not necessary," Spano said. "But are they necessary across the board?"

The Senate was scheduled to vote Wednesday on two bills that would have the state study Massachusetts' new universal health care program and the potential effect of creating an insurance program for people with chronic or severe health problems.

The results of these studies could lead to more legislation down the road, said Rep. Brian Patrick Kennedy, who serves on the committee that created the bills and chairs the House committee hearing them Wednesday.

Kennedy said there is particular interest in how Massachusetts' universal health care program is working. The law passed in April would require everyone in Massachusetts be insured by July 2007, providing subsidies and sliding-scale premiums to get poor and low-income residents into health plans.

"I think that's a laudable goal," Kennedy said. "Can Rhode Island afford to do the same thing?"