National state health care expert offers testimony backing Iowa health care coverage partnership program

Untitled Document

FOR IMMEDIATE RELEASE: February 18, 2009
CONTACT: Austin Guest, (212) 680-3116 ext. 110,


Points to savings and expanded care from allowing small businesses access to state employee purchasing pool

Des Moines, IA - Today, at a hearing of the Iowa State Senates Subcommitteee on Senate File 48, Progressive States Network Senior Health Care Policy Specialist Adam Thompson provided the following written testimony in support of Sen. Jack Hatch's owa Health Care Coverage Partnership Program:

Testimony of Adam Thompson, Senior Health Policy Specialist
Progressive States Network
Provided to the Subcommittee on Senate File 48
Iowa State Senate
In Support of Senate File 48, Division 1
“Establishing the Iowa Health Care Coverage Partnership Program”
February 18, 2009

Sen. Jack Hatch, Sen. Joe Bolkcom, and Sen. James Seymour, thank you for the opportunity to testify in support of Senate File 48 and, specifically for today’s discussion, in support of Division I to establish the Iowa Health Care Coverage Partnership Program. My name is Adam Thompson. I am the Senior Health Policy Specialist with the Progressive States Network. The Progressive States Network is a non-profit and non-partisan national network of legislators and advocates promoting progressive state-level policies.

We strongly urge support of Senate File 48, and specifically Division I. SF48 Division I comes at a time of renewed hope for comprehensive health care reform in Washington DC; it is within this context that makes the Health Care Coverage Partnership Program such an important initiative. Touching on similar initiatives in other states, this testimony will focus on the role of the Partnership in (1) driving the development of national health care policies (2) infusing the market with competition to offer small business owners and their employees more options and choices for health insurance and (3) ensuring that Iowa continues to make important advancements in health care that will position Iowans to take advantage of relief in the form of federal health care reform.

The Iowa Health Care Coverage Partnership Program would allow small businesses, non-profits, the self-employed, and municipalities to purchase employee health insurance through the state employee health plan. This would enable small groups to benefit from the purchasing and negotiating power of the state employee plan, which covers tens of thousands of Iowans. The Partnership would infuse the Iowa insurance market with new competition and provide Iowa’s small business owners and taxpayers with more options and choice for health insurance.

In health insurance, small employers face higher costs than large employers, or groups.  This is because large groups are able to spread costs over a larger group of people, or pool, and use their bargaining power to negotiate betters rates from insurers and providers.  The many cost-saving benefits of pooling with a larger group should be the option of all small employers, municipalities, and self-employed Iowans. In Connecticut, where a similar initiative was proposed in 2008, the sponsor, House Speaker Chris Donovan, estimated $8,664,337 in savings for the City of New Haven if it joined the state employee plan; savings that could be invested in local economic stimulus through infrastructure improvements or returned to taxpayers in the form of property tax relief.

In Iowa, small businesses with older employees face higher costs than businesses with a younger average employee age because state law allows insurers to charge higher premiums to small businesses with older employees. The Iowa Partnership Program may especially benefit these small businesses with older employees, enabling these employers to maintain coverage during the worsening economy by making available comprehensive health care services at a more competitive rate.

Creating the Iowa Health Care Coverage Partnership Program would put Iowa at the forefront of state and national health care reform. While approximately 24 states grant local public employees access to the state employee health plan, SF48 would be the first law extending that opportunity to small businesses, the self-employed, non-profits, and municipalities in a state.  This public/private employee pooling option is gaining traction in state house across the country. Lawmakers in New Hampshire, Connecticut, Wisconsin, Washington, New York, and Oregon will be considering similar efforts this year.

Nationally, a key priority for federal reform — promoted by President Obama as well as Senate and House health care leaders — is the creation of a public plan option available to all residents and to compete on a level playing field with private insurance options. This priority, which offers greater efficiency, affordability and choice for businesses and consumers, has strong similarities to the Iowa Health Care Coverage Partnership Program. Additionally, federal reform is likely to support strong state/federal collaboration in health care to cut costs, improve quality, and expand access to all residents. By enacting reforms now that are likely to be replicated or support by federal policy, Iowa will be well positioned to take advantage of any new federal health care reforms.

Furthermore, Iowa’s actions on health care reform could heavily influence the direction of federal reform. Federal lawmakers are looking to the states for guidance and ideas, as represented by recent attention to Iowa’s efforts to improve health care for children and to ensure all kids have coverage. The Iowa Partnership Program would pressure federal lawmakers to pursue similar programs nationally.

Iowa is on the leading edge of a groundswell of state health care reform activity. Establishing the Partnership Program would put Iowa at the forefront of states advancing real solutions to the health insurance crisis afflicting families and small businesses.  The program could reduce health insurance costs for business owners, local taxpayers, and employees and position Iowa to both inform and take early advantage of likely federal health care policy.