A small-business insurance bill that would base employers' rates on the health of its workers may lead to health discrimination in the hiring process.
Gov. Jeb Bush should veto the small-business insurance bill now headed his way. The measure, which allows insurance companies to set rates based on the health of each employer's workers, would certainly make life more comfortable for insurers. But it would drive a new wedge between co-workers _ and ultimately discourage employers from hiring older or sicker employees. Intended to entice fleeing health insurers back to small businesses, the measure may well have the effect of driving the neediest workers out.
The final bill, similar to one championed by Rep. Frank Farkas, R-St. Petersburg, does away with "community rating," the pricing system that has served employees well for a decade. That system was designed to spread the risks and costs of insurance over a broad base. Under it, insurers have calculated premiums by looking at the combined experience of similar employers, not by singling out individual workplaces in which a few employees have suffered more than their share of illness. Insurers have been able to take into account individual factors such as age, though not claims experience.
If Bush signs the small-group bill, the industry could start charging up to 15 percent more for the unhealthiest groups. Employers who hire older workers, or those with medical problems, would face a significant increase, one to be paid by healthy co-workers as well. For many small businesses, insurance would become less accessible and affordable. Over time, the neediest workers would be likely to find not only their insurance, but also their jobs, out of reach.
As even legislative staff warned lawmakers: "The bill may impact an employer's hiring decisions, due to an employer's concerns about how the health status of employees will affect the employer's group health insurance premium."
Farkas and others are right that Florida has to shore up the small-employer market. But it should not do so on the backs of its oldest and sickest workers.