Governor signs health insurance law
Published June 6, 2007
When Gov. Matt Blunt signed the Missouri Health Insurance Portability and Accountability Act into law June 1, Missouri became the last state to comply with the 1996 Federal HIPA Act.
Rep. Doug Ervin, R-Kearney, who sponsored the bill, said the law would increase the number of Missourians with health insurance.
"A lot of small employers want to provide health insurance but can't afford it," Ervin said. "This bill provides an alternative for small businesses to provide health coverage."
Of businesses with 50 or more employees, 96 percent offer health insurance, but less than half of businesses with 50 or less employees offer coverage, Ervin said. He said estimates of uninsured Missourians are around 700,000, or about 12 percent.
Cheryl Fish-Parcham, deputy director of health policy for Families USA, an advocacy group for health insurance consumers, said finding private health coverage could be unaffordable because there is unlimited variation in the premiums required for health costs.
"It's a totally unregulated market," she said.
Because insurance is so expensive for small businesses to provide for their employees, many employers simply add extra money to employees' paychecks so they can find their own health packages. This extra income is still taxed.
The new law will give tax breaks to employees so they get the full benefit of the extra money.
"Forty-three percent of employees believe that employers don't have their best interests in mind when purchasing health insurance," Ervin said. "This bill helps us move from an employer-sponsored model to an individual-owned model."
The self-employed are not reimbursed for providing health insurance by federal law, but the new law will help the self-employed pay for health care for themselves and any employees they might have, Ervin said.
According to the text of the bill, "A self-employed taxpayer, as such term is used in the federal internal revenue code, who is otherwise ineligible for the Federal income tax health insurance deduction ... shall be entitled to a credit against the tax."
The bill also makes some changes to the Missouri Health Insurance Pool. Also known as the high-risk pool, the Missouri Health Insurance Pool is a state-sponsored health insurance program that covers individuals who cannot obtain affordable health insurance packages because of a high-risk health condition. The new law will lower the threshold of who is eligible for the high-risk pool and lower the premium that enrollees would pay to enter, Ervin said.
Because of the new tax credits, there is a projected cost of $2-11 million to the state in addition to $7 million in costs to the Missouri Health Insurance Pool, Ervin said. He said although the state will see immediate costs, the state is already working out a long-term plan to pay for them.
Ervin said he hopes that by giving individuals more freedom in choosing their health care, costs will become more transparent and the market will respond to individuals privately shopping for their own health care.
"We've really changed the face of what small employers have available to them and what individuals have available to them in regard to health insurance," he said. "We do expect more people to be insured."
