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West Virginia Implements Small Business Plan

In early 2005, West Virginia rolled out the Small Business Plan, a public–private partnership between the state's Public Employees Insurance Agency (PEIA) and a private insurance carrier, Mountain State Blue Cross Blue Shield (BCBS). Under the Small Business Plan, Mountain State BCBS offers a comprehensive, affordable health plan to uninsured businesses with two to 50 employees. The insurer discounts one of its commercial, high-deductible preferred provider organization (PPO) plans (with $1,000, $3,000, and $5,000 deductibles). It then uses the reimbursement rates to providers and prescription drug prices negotiated through PEIA's multi-state purchasing plan. These provisions, combined with smaller administrative fees to the insurer, result in premiums averaging between 17% to 22% lower than the standard rates. So while West Virginia does not subsidize the plan, qualified small businesses and their workers still benefit from the state's purchasing power.

A statewide marketing campaign began at the end of June 2005. As of early August, approximately 437 people were covered through 289 contracts.[1] A wide variety of small businesses are participating, including car dealerships, accountants, plumbers, high-tech firms, truckers, dentists, and even some Blue Cross Blue Shield agents.

Mountain State BCBS reports that they have not been experiencing adverse selection, whereby only high-risk people seek out the coverage. So far, the risk levels for the Small Business Plan pool are lower than for their regular small business book of business. As one BCBS official stated, "These people are not uninsurable, they are just uninsured."

[1] The majority of the contracts (about 200) were for individuals; 26 were child and employee contracts, 29 were employee and spouse contracts, and 32 were family contracts.

For More Information: See West Virginia Small Business Plan Web site

Stretching State Health Care Dollars: Building on Employer-Based Coverage, Sharon Silow-Carroll and Tanya Alteras, The Commonwealth Fund, October 2004

Contact: Sonia Chambers, Chairperson, West Virginia Health Care Authority, 304-558-7000, [email protected]

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