New Sole Proprietorships Banned From AZ Healthcare Group

The state’s insurance plan for small businesses looked doomed, but new legislation may pass that saves coverage for existing customers.

Whatever form the bill arrives in will meet with opposition from rich private health insurance companies that want no part of competing with the state for small businesses. Unfortunately for sole proprietors who may want to join the revamped state Healthcare Group in Arizona, it looks like that option will not be available.

The Arizona Republic said a bill received Senate approval to save the money losing program. Sole proprietors won’t be able to join, and the bill caps employer growth in the program at 10 percent per year.

Ideally, the program would sustain itself with premiums. The state withdrew subsidies for the program two years ago, but expanding membership eligibility escalated its costs, something partly blamed on the sole proprietors who brought high medical expenses into the program.

The bill requires Healthcare Group to charge premiums high enough and verified to cover medical and administrative expenses, the report said. Further, Healthcare Group could charge higher premiums to people with preexisting medical conditions, and ban them from going to emergency rooms that do not contract with the Group unless it is an emergency.

As we noted previously, HealthWorks in New York City managed to find a way to grow and expand in one of the most expensive places in the world. Perhaps Governor Janet Napolitano ought to stop worrying about Google coming to Arizona and pay attention to the Big Apple, as should the state’s Senators who are hearing from insurance company lobbyists.