08:29 PM PST on Wednesday, March 31, 2004

Associated Press

NWCN Washington Governor Gary Locke

OLYMPIA, Wash. -- Gov. Gary Locke has signed health care legislation aimed at helping small businesses, but critics said Wednesday it doesn't do nearly enough to help small companies provide affordable policies.

Three small-business groups announced plans for a fall initiative to authorize insurers to offer a "bare-bones" health insurance policy that would include only basic coverage.

"We have no other choice but to take our case to the people," said Carolyn Logue, director of the 15,000-member state chapter of the National Federation of Independent Business, the country's largest organization for small businesses.

Locke, on the other hand, was pleaed with the legislation, House Bill 2460, which he helped broker on the final day of the recent legislative session.

The new law helps in a variety of ways, said Locke adviser Ree Sailors.

She said it will remove single-person "groups" in the future and lower costs of claims, streamline some administrative costs and protect small-group consumers' portability of policies.

It will also allow groups or employers with between two and 50 people to buy a "value plan" for members that is not tied to the 1993 version of the state-subsidized Basic Health Plan, she said. Previously, the value plan could be offered only to workplaces with fewer than 25 members.

Sailors said the legislation also adopts new rating factors that allow plans to take into account deductibles and copays, and makes other changes that should allow a greater range of rates within the small group market.

Small business owners have complained for years that Washington undercuts their efforts to provide affordable health care for their employees by piling on requirements for coverage.

Idaho has seven state mandates on health insurers, but Washington has 47, the business groups said Wednesday. Unhappy with the governor and the Legislature, they said they are determined to win changes at the ballot box.

"Small businesses can't wait any more," said Logue. "These are people, small business owners and their employees, who are without health-care coverage. Given the current political environment in Olympia over the past several years, a real solution has not been possible."

She credited the Republican Senate with passing amendments to make a better bill, but said the Democratic-controlled House gutted the bill and rejected the Senate efforts.

The critics' news release says the Legislature "neutered" a bill that could have provided help.

"Small business owners and their employees need more help" than the bill that emerged, said Gary Smith, executive director of the Independent Business Association.

The initiative, sponsored by the two groups plus the Washington Association of Health Underwriters, would allow insurers to offer one bare-bones plan with limited coverage.

Details are still being worked out.

Sponsors will try to have the measure ready in about two weeks. They will have until July 2 to collect about 250,000 voter signatures.

"The only thing we lack, because we're small business groups, is money (to hire paid signature-gatherers), but we've certainly got the volunteer base," Logue said in an interview.