A Second Try at HealthFirst

Over the last nine years, health insurance premiums for small businesses have risen 113 percent nationally.
Slightly less than half of very small companies now offer health insurance.

Trying to solve this crisis here in New Hampshire Governor Lynch backed an initiative designed to give small businesses good coverage at an affordable cost.

Here he is during his inauguration in 2009, talking about the accomplishments of his previous term:

Governor Lynch: “We ended the ability of insurance companies to discriminate against sick workers, passed a new more affordable health insurance plan for small businesses and we expanded children’s health insurance.”

Lynch was heralding HealthFirst, a new plan whose premiums were to be no more than ten percent of the previous year’s statewide median wage.

At the time, an advisory committee was busy hammering out the details – so it was easy – and fair -- to cheer passage of the law that would create HealthFirst.

And here’s the governor again in January of this year, giving his state of the state speech:

Governor Lynch: “Here in New Hampshire, we aren’t waiting for Washington to act. We are changing our health care system now. Small businesses need access to a more affordable health care option, so we created a new less expensive, prevention-focused alternative – New Hampshire HealthFirst.”

But for most buyers, HealthFirst isn’t more affordable.

Representative Ed Butler, a Democrat and innkeeper from Hart’s Location, was on the advisory committee that created the plan.

But after spending months helping to design it, Butler didn’t sign up.

Representative Ed Butler: “You said that we didn’t buy it at Notchland Inn and hoped to, and that’s indeed true, because it turned out to be more expensive than I had expected and therefore, because we’re a small business and the economy is very tight, we just couldn’t find a way to do it.”

Butler has a lot of company.

Kelly DeFeo is a self-employed nurse anesthetist who lives in Conway.

She buys insurance to cover her family of four.

Late last year, Anthem told her that her monthly bill – already high at $2000 a month – would be going up, a lot.

Kelly DeFeo: “They wanted $2800 a month for my insurance plan for my family. It was just cost prohibitive!”

She’d heard about this new, more affordable plan for small businesses, and she looked into Anthem’s version of HealthFirst.

But that didn’t pan out.

Kelly DeFeo: “It was no cost savings for me. It was no real difference.”

DeFeo wound up buying a high-deductible plan from MVP – and because, she says, North Country providers don’t accept that insurance, she now drives an hour south to see doctors who do.

DeFeo’s story and others like it don’t surprise Toby Arkwell.

He’s an insurance broker in Dover.

He’s sold one HealthFirst plan.

Toby Arkwell: “The savings is not all that dramatic. There are, in my opinion, in the Anthem list of plan options there are better value options in there.”

Remember the provision that said HealthFirst premiums would not be more than 10 percent of the previous year’s median wage?

That would be about $330 per month.

But the cheapest rate for the safest risk worked out to be about $370 per month.

And it gets more expensive from there, depending on your age, the size of your company and your profession.

So by late January, three months into the program, only 55 companies had purchased HealthFirst, mainly from Anthem.

It’s covering about 400 people.

To be fair, if you’re a green eyeshade kind of person – you like spreadsheets and you actually read your insurance policy start to finish -- you would discover that HealthFirst is cheaper.

Cheaper than a plan with equally good benefits, that is.

That was a disappointment to a lot of people.

But Leslie Ludke of the Insurance Department says they had the wrong idea.

Leslie Ludke: "This was never designed to be the cheapest plan on the market. There are cheaper plans on the market."

But they don’t have a wellness component and they do sport extremely high deductibles.

So Health First’s prime sponsor Senator Kathy Sgambati, Representative Butler and a handful of other lawmakers are trying again.

They want to create a stripped down version of the plan– one that will still focus on wellness, but that will, in fact be cheaper.

Ed Butler says he doesn’t yet know what it will look like.

Representative Butler: “There may be something relative to deductibles, there may be something relative to coinsurance. We have mandates in the state, and I think those are important to continue to support.”

Not surprisingly, there are skeptics.

Senate Minority Leader Peter Bragdon voted for the original HealthFirst.

Senator Peter Bragdon: “I think most of the Republicans voted for the initial bill. Saying OK, let’s give it a try, we can’t just sit here and not try anything.”

But even then he had reservations.

Senator Bragdon: “There was a little bit of concern about should the government be doing stuff that the private sector should already be doing and in many cases is already doing, and I think this proves the point that this didn’t work out so well.”

So when this cheaper version of HealthFirst comes up for a vote?

Senator Bragdon: “As of this moment, I’m leaning against it. I’m willing to listen to arguments why I’m wrong. I have been known to be wrong.”

Whether the Republicans go along or not, Governor Lynch supports the legislation, as do most Democrats.

So it has a good chance of passing.

And this time around, Ed Butler is optimistic that he’ll be able to buy the plan -- or one like it.

Peter Bragdon says the government doesn’t need to intervene because the insurance companies are designing competitive plans.

But Butler says if that’s the case, the government can take some of the credit.

Representative Butler: “I think it’s in part from the growing pressures of lack of affordability in the models that are available and the pressure from the design of HealthFirst.”

Whoever’s designing the next health insurance product, they’ll have to deal with some basic math.

These days, it’s may be impossible to create a good plan that doesn’t cause sticker shock.

For NHPR News, I’m EG.