Small N.J. Employers Call Hikes 'Excessive'

The Record ( — Friday, March 5, 2010

The Record

A group representing 650 of New Jersey's small businesses called for legislative hearings Wednesday about steep increases in health insurance premiums.

The New Jersey Main Street Alliance asked Senate President Stephen Sweeney to convene oversight hearings about "excessive rate increases." It also called upon the state insurance commissioner to investigate premium hikes over the last six months that it said ranged from 30 percent to 120 percent.

About 770,000 people are enrolled in small-group insurance plans in New Jersey, and an additional 112,000 buy insurance on their own.

Every company reported double-digit increases for small businesses this year, according to information provided by the state Department of Banking and Insurance. Horizon Blue Cross Blue Shield of New Jersey, whose HMO and other managed-care plans account for more than half of the market, reported rate increases of 20 percent to 30 percent, an insurance department spokesman said.

"State regulators must protect consumers from these outrageous increases," said Dr. Odette Cohen, a pediatrician whose Willingboro practice employs nine people. She was one of three business owners on a conference call arranged by the alliance to announce that it had sent letters to Sweeney and Aacting Insurance Commissioner Thomas B. Considine.

In November, Horizon increased the premium for the four employees insured by Cohen's practice by 33 percent, she said.

"I want to provide health insurance because it's the right thing to do," she said. But while her overhead is rising with higher premiums, her revenue is falling. Fewer of her patients have health insurance and, of those who do, more find their share of the cost unaffordable.

The alliance was formed two years ago by New Jersey Citizen Action, a consumer advocacy group that is part of a national coalition pushing for comprehensive national health care reform.

Kelly Conklin, owner of an 11-person architectural woodworking company in Bloomfield, said he received a renewal letter from HealthNet with a premium hike of 125 percent. Recent layoffs drove up the average age of the employees, and health insurers charge more for older members.

"Obviously we can't afford that," he said.

"It's important to remember that the premium increases are driven by increases in the cost of medical care," said Ed Rogan, a spokesman for the Insurance Department. Managing insurance costs is a top priority of the Christie administration, he said.

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