SENATE AGREES TO HOUSE VERSION ON HEALTH INSURANCE PLAN

FOR IMMEDIATE RELEASE                                                                     Thursday, May 8, 2008

Contact: Senator Kathleen Sgambati

(603) 271-3074

SENATE AGREES TO HOUSE VERSION ON HEALTH INSURANCE PLAN

CONCORD – The Senate voted today to concur with the House on legislation dubbed New Hampshire HeathFirst that aims to provide a more affordable alternative for small business health insurance.

The concurrence means Senate Bill 540 heads to Governor John Lynch who has said he will sign it into law. Lynch had promoted the concept of an affordable health insurance product for small business, using a “wellness” model to produce savings. Senator Kathleen Sgambati (D-Tilton) worked with the governor to bring the bill forward and served as its prime sponsor.

“This legislation gives us an opportunity to contain rising insurance costs for a critical segment of our economy – our small businesses. It does so not by limiting healthcare services but by using a wellness model to create some of the same savings that many large companies have negotiated into their insurance contracts,” said Sgambati said.

The legislation would require major insurance carriers in the state to offer a standard wellness plan for small businesses with up to 50 employees. Premium costs would be controlled by focusing on prevention, managing chronic conditions and promoting best practices. Similar legislation in Rhode Island produced a savings of more than 15 percent for small businesses compared to other forms of coverage available in the market.

The legislation calls for the state Department of Insurance to set up a special advisory committee that includes small business owners. The committee would design the wellness plan with a target premium price of 10 percent of the prior year’s median wage, currently about $262 per month.

“In order to take control of our insurance costs, we need to have wellness models,” said Senator Robert Clegg (R-Hudson). “This is a great first step in the right direction, recognizing that preventive care saves money.”

The House added a requirement that an actuary assess whether the wellness plan could be offered at the target price before any insurance companies are asked to provide the product. Insurance companies remain free to use their own actuaries to set a premium price.