CSHB 10(HES)- GROUP HEALTH INSURANCE FOR PRIVATE GROUPS  CHAIR BUNDE announced CSHB 10(HES) to be up for consideration. MS. HELEN BEDDER, staff to Representative Cheryl Heinze, said this bill is very different from it original version. It had a large fiscal note and the Department of Administration was involved. Currently, the bill has no fiscal note and the department is no longer involved. A key feature of the bill is that it really works to help non-profit organizations obtain insurance. The [non-profits] have a commitment from the Mental Health Trust Authority to provide funding to help them obtain insurance through this type of policy and they are currently very actively working with Dennis McMillan in Anchorage to get funding. CHAIR BUNDE said one comment in the health insurance purchasing cooperative reports says that in many instances state laws have prohibited insurers from offering co-op premiums at a lower rate than those charged to employers outside a co-op. He asked why states would have laws against trying to provide the lowest possible insurance depending on the market. MS. BEDDER replied that she didn't know the answer to that. MS. KATIE CAMPBELL, Division of Insurance, explained that state laws differ, but most states have small employer reforms where you have to guarantee issue to a small employer. Most states define a small employer as one with 2 to 50 employees. Most states with cooperatives have required the premiums within the pool to be somewhat nearer the outside to prevent selection problems where only the healthier or the sicker people remain in one area or the other. She pointed out, "You don't want to disadvantage one market for the other." CHAIR BUNDE said they don't insure on personal risk but rather on the risk of the group. MS. CAMPBELL replied that is true. SENATOR FRENCH asked her to explain the following bullet statement: Under HB 10, a health care insurer may decline to cover or may restrict the coverage offered to a self- employed individual under an association plan. This applies only to a self-employed individual who joins a group, but not for employees of either large or small employers. MS. CAMPBELL replied that is a complicated issue. Initially they weren't able to include the self-employed in this kind of a plan because of the fear that individuals who are particularly unhealthy would attempt to join the pools and cause the rates to go up. In order to avoid that problem, this bill allows insurance companies to look at the individual self-employed people separately from employees of an employer. By allowing that, the insurer can prevent a particularly unhealthy person from increasing the rates for everybody else. With this bill, the insurer can actually decline coverage or put a restriction on the coverage for that individual self-employed person only. It doesn't affect anyone else. CHAIR BUNDE asked if that is because there are fewer self- employed people than there are employees. MS. CAMPBELL replied the issue is the self-employed are really not a group; they are individuals. When insurers come in to offer insurance to a market, they look at the market they are going to insure and get a volume discount. SENATOR FRENCH said: It sounds like a compromise and a way of balancing risk for the insurance company to be able to stop this one sick individual from joining the pool, but not being able to stop this group that wants to get in... CHAIR BUNDE added, "Who might have a sick individual, but will have hundreds of other people whose premiums will make up for the sick one." MS. CAMPBELL responded, "That's about right." SENATOR SEEKINS moved to pass CSHB 10(HES) from committee with individual recommendations and zero fiscal note. SENATORS STEVENS, FRENCH, SEEKINS and BUNDE voted yea and CSHB 10(HES) passed from committee.