Archive for Tuesday, March 13, 1990


March 13, 1990


Testimony before the House Insurance Committee Monday showed strong support for a bill aimed at making health insurance available to thousands of Kansans who now go without it.

The bill would create incentives for companies with 25 or fewer employees to provide health care insurance benefits through group plans.

No one spoke in opposition, although a number people speaking in support of the legislation did point to possible flaws in the bill. Groups supporting the bill included the American Association of Retired Persons, the Kansas Chamber of Commerce and Industry and the Kansas Hospital Assn.

At the close of the hearing, Committee Chairman, Rep. Dale Sprague, R-McPherson, said the committee would act on this and other insurance bills this afternoon.

LEADING testimony in favor of the bill was Rep. Jessie Branson, D-Lawrence, vice chairman of the Commission on Access to Services for the Medically Indigent which created this and other health care bills being considered this session.

Mrs. Branson said the bill in no way requires companies to get health care coverage but said the legislation was needed. More than 16 percent of the Kansas population more than 450,000 people have no health care benefits, she said.

"Small businesses are particularly hit the hardest," Mrs. Branson said. She added that the Kansas Department of Commerce says about 90 percent of the businesses in the state employ 25 or fewer employees.

Under the bill, any two or more Kansas employers with 25 or fewer employees who have no health insurance are authorized to put together a health insurance plan to cover employees and their dependents. The bill applies to companies that have had no health insurance plan for two years, and the employers must make a minimum contribution on behalf of the employee.

IN RETURN for setting up the plan, the employer may claim a state income tax credit phased in over a five-year period and based on the percentage of the total premium paid or $25 a month per employee, whichever is less.

The bill limits to 10,000 the number of employees who could be covered statewide, thereby limiting the amount of tax credits given to $3 million.

Terry Leatherman of the Kansas Chamber of Commerce and Industry told the committee that the number of medically uninsured Kansans is increasing. And he said a significant number of these people are employed.

"A small employer's decision not to provide an employee health insurance program hinges on the cost of insurance," Leatherman said. He cited figures from the Health Insurance Institute of America that show that health insurance rates for small businesses are 40 percent to 50 percent higher than for large businesses with similar coverage.

The bill is divided into two parts, the first with a high deductible aimed at providing "catastrophic" insurance coverage. Under the second part, a board of directors representing employers who make the joint effort to provide the insurance could determine what benefits would be covered.

LEATHERMAN said the high deductible for the first phase is a problem. "While the formerly medically indigent worker would now be insured, the worker might still be unable to afford basic health care," he said.

Tom Bell, representing the Kansas Hospital Assn., said that in trying to provide health insurance for employees of small businesses, the state can either mandate coverage or come up with plans such as those in the bill before the committee.

Mandating health insurance, he said, would be "problematic" because of the financial stress it would place on small businesses.

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