Small businesses unclear about health insurance New state law will change rates

Confused about the state's new health care reform law, some small-business leaders from Howard County sought answers from insurance experts yesterday at a briefing on the new law at Howard County General Hospital.

Employers said they want specific information about insurance rates and how the new law will be implemented.


"I need to learn more, much more," said Swati Saraiya, a Columbia obstetrician and gynecologist. "As a doctor and private practitioner, I need to know where we're headed."

About 30 employers and executives from the area attended the two-hour seminar, which featured three speakers who described the law and its potential impact on businesses.


Under the law, which takes effect July 1, 1994, insurers who offer coverage to small businesses may not refuse to cover any business with two to 50 employees.

The law also creates a standard package of medical benefits, regulates insurance rates, and eliminates pre-existing health condition clauses, which prevent many chronically ill people from receiving adequate insurance.

"This is specific health care insurance for Maryland," said speaker Bryson F. Popham, an Annapolis lawyer who specializes in insurance issues. But many business owners still don't know about the law, speakers said.

Ann H. Howard, president of Ann H. Howard & Associates Inc. Benefit Planners in Easton, said she has found in recent conversations that many of her clients "were completely unaware that the bill had passed."

Some of those who attended yesterday's session voiced the hope that the new law would solve their current health insurance problems.

Dr. Saraiya said she is having trouble getting health insurance for her 15 employees because one is the mother of an infant who has a pre-existing health condition.

"We've run into severe problems trying to get insurance," said Dr. Saraiya, who has spoken with three insurance carriers.

Small employers are especially worried by warnings that their health insurance rates are likely to rise as a result of the new Maryland law. Under the law, age and geography will be factors used to adjust insurance rates, a system commonly known as "community rating."


"Most employers will see a slight to moderate increase," Mr. Popham said.

But employers need to know how much their insurance rates will go up, and whether rates will be based on where employees live or where they work, speakers said.

"For the business owner, it's absolutely crucial," Ms. Howard said of insurance rate information. "We don't know what the rates will be."

President Clinton's pending health care reform plan only promises to add to the confusion surrounding the new state law, according to the speakers.

"The next two years will be a total upheaval," Ms. Howard said.

Yesterday's seminar was sponsored by Howard County General Hospital, the Center for Insurance & Related Services and Ann H. Howard & Associates Inc., Benefit Planners.