2003 Senate Bill 460 ↩

House Roll Call 194: Passed

To require that health insurance companies writing policies for small companies and groups (between two and 50 employees) use a “rate band” pricing method, which would limit price variations so that insurance for the highest and lowest cost group could be no more than a certain percentage greater than the lowest cost group (the “rate band”). “Cherry picking” by insurers, or only insuring the healthier members of a very small group, would be restricted by allowing an insurer to require that most or all of the members of a particular group be included under a policy. The rate bands would be somewhat narrower for Blue Cross Blue Shield (BCBS), a tax-exempt non-profit entity which currently controls most of the small group market, than for private, for profit insurance companies which are not tax exempt. In addition, the bill imposes limits on small group health policy price increases, and many other regulations on insurers. It is part of a legislative package which would subject the private companies participating in this market to extensive new government regulations, while easing some of the existing regulations on BCBS, which would still have less flexibility than the private companies. The House-passed version grants more flexibility to for-profit, non-tax exempt private insurers relative to Blue Cross Blue Shield.