COEUR d'ALENE - A Seattle-based health insurance provider's decision to stop covering small employer groups in Idaho will leave 450 people in the Coeur d'Alene and Moscow areas without medical insurance come Jan. 1.
Group Health's decision to discontinue insuring groups of 50 people or less is a business decision that has nothing to do with health care reform, said Bob Burden, the administrator for the organization's coverage area east of the Cascades.
"Due to the small size of our small group enrollment in Idaho in the very limited geographic area that we cover, our small group product just has not been viable," Burden said.
The move affects 38 small groups in Kootenai and Latah counties, the only Idaho regions covered by Group Health.
The insurer notified the Idaho Department of Insurance last month that it will not renew any existing small business plans after the end of the year, and that the company will withdraw any outstanding quotes for new small group business.
Letters started going out notifying the affected employers last month.
"The major issue is the fact that insurance works on the law of large numbers," Burden said. "Most other carriers are able to cover the entire state of Idaho and have a more significant enrollment in the small group products."
In the two coverage areas, Group Health will continue to write and renew larger group plans, because the larger member bases provide premiums that are in line with rising health care costs.
Claims expenses were going up in Idaho, Burden said, and the only options were to raise premiums or subsidize the costs from other sources within the company, which is a not-for-profit consumer co-op.
"We really looked for any way of sustaining this business without being unfair to these consumers or our other consumers," he said.
Group Health is not competitive, Burden said, and the company's leadership felt that continuing to insure the small groups was not beneficial to the small employers in the area or the insurer.
"It's one of these decisions we've anguished over for several months," he said.
In the first quarter of this year, Group Health quoted 102 proposals for small groups in Idaho and placed only one.
As the small employer group plans come up for renewal, Burden said Group Health will assist them in finding new plans with other carriers.
Group Health covers more than 600,000 people, mainly in Washington.