CONCORD - Gov. John Lynch and Insurance Commissioner Roger Sevigny said today that the state will be ready in January to implement SB 125, a new health insurance law that will return fairness and stability to the small business health insurance market.

"When it goes into effect on January 1, SB 125 will restore fairness and stability to our small business health insurance market," Gov. Lynch said. "This new law will spread risk more equitably so that one sick employee will not cause a small business's health insurance rates to skyrocket. It will protect small businesses from rates that are unreasonably higher than the average rate. And this law will promote the stability of rates over time, something our small businesses desperately need.

On January 1, SB 125 will replace New Hampshire's existing small business health insurance law, commonly known as SB 110. That law distorted New Hampshire's small business insurance market, allowing insurance companies to discriminate against sick workers and to charge more for companies in certain parts of the state. SB 110 led to dramatic health insurance price hikes for many of New Hampshire's small businesses.

"This law will stabilize and moderate rate increases by spreading risk fairly and reasonably across the small group market, but it will not end them. This law is a first step, our businesses, taxpayers and citizens can't afford for it to be our last," Gov. Lynch said.

While some are claiming that the law will force insurance companies to leave the state. Only two have said they will, and they only insure 35 people. Meanwhile, since the passage of SB 125, a major insurer is looking to enter the New Hampshire market.

Even outside of the impacts of SB 110, the health care cost increases that New Hampshire has been experiencing are not sustainable. Those increases are a result of trend - increased use, increased prescription drug costs, the costs of the uninsured.

"They are increases that we are all seeing - small businesses, large business, individuals, and state government," Gov. Lynch said. "And it is a challenge that we must address together as a state."

Gov. Lynch has created the Citizens' Health Initiative, bringing together businesses, consumers, health care providers, and elected officials to recommend ways to control the growth in health care costs in New Hampshire while improving quality.

In addition in the past year, Gov. Lynch signed legislation creating a screening panel to reduce health care costs by screening out frivolous medical malpractice lawsuits; Gov. Lynch worked to increase the state's investment in the Children's Health Insurance Program; and the state has created a comprehensive health care information system, to give consumers and businesses information about health care choices and costs. The departments of Insurance and Health and Human Services will also be collecting and analyzing claims data, so citizens can see how healthcare dollars are spent.

The Insurance Department has taken a number of steps to make sure the state is ready when SB 125 goes into effect, including:

Establishing The Small Employer Health Reinsurance Pool: The reinsurance pool is designed to encourage carriers to participate in New Hampshire's small employer health insurance market by providing a mechanism that carriers can use to spread the costs of covering groups with unusually high health care expenses. This mechanism will not affect an employee's coverage.

The Board of Directors of the Reinsurance Pool has been elected, and a plan of operation, articles of incorporation, and bylaws have been filed and approved by the Insurance Department. The standardized family health statement, reinsurance premium rates and rating methodologies have also been filed and approved so that carriers in the small employer market will be able to reinsure risks into the pool commencing January 1, 2006.

Creating the Commissioner's Advisory Committee on SB 125 Implementation: Commissioner Sevigny has appointed an advisory committee consisting of carriers, brokers and business representatives to ensure an orderly transition to the new rating rules on January 1, 2006. The carrier members of the committee have agreed to provide with all rate quotes a rate calculation disclosure form designed to provide small business some basic information about how their quoted rate was calculated.

Educating Consumers, Businesses, Brokers on SB 125: The Insurance Department has posted FAQs on its web site (www.state.nh.us/insurance/) regarding SB 125. One set of FAQs is designed for consumers and small businesses. Another set is designed for health carriers and brokers. In addition, Insurance Department representatives have conducted three training sessions for brokers on the changes being brought about by SB 125.