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Small businesses burdened by rapidly rising health-care costs could get relief under initiatives sought by Gov. Linda Lingle. Key among them is reviving association health plans in Hawaii, Lingle said in opening remarks to lawmakers on Jan. 26.
According to language in the proposed legislation, Lingle wants "health plans to recognize trade associations (e.g., The Chamber of Commerce of Hawaii) as employer groups that are eligible for group rates."
Under the plan, companies would avoid purchasing costly, small policies directly from insurers. By handing together, they would increase their bargaining power to obtain more affordable coverage, advocates say.
While the proposal generally has support from the smallbusiness community and the state's insurance commissioner, it's unclear whether such plans are viable.
In fact, Hawaii health insurers abandoned groups like the 1,800-member Hawaii Farm Bureau, the Hawaii Bar Association and The Chamber of Commerce sometime between 2000 and 2002, claiming the underwriting risk was too great, said Cliff Cisco of Hawaii Medical Service Association.
"They didn't behave like a typical employer," Cisco said....