Virtually every health insurance company rejected Ethel Hunt after she had heart bypass surgery in 1987.
"Once you had any type of medical problem at all, they wouldn't touch you," recalled the 52-year-old Arnold businesswoman.
But that's no longer true for employees of small businesses. A year-old state law has reformed insurance industry practices, making it much easier and in many cases much cheaper for these workers to buy policies.
"For me it's been really great," said Mrs. Hunt, who runs an accounting and tax preparation firm with her husband. She has been able to buy a good policy for $198 a month, $100 less than she was paying for a bare-bones plan.
"I've got a million dollars worth of hospitalization" and a (x prescription plan that covers all but $15 of her $80-a-month prescription for cholesterol-lowering medication, she said.
Experiences like hers have washed away initial pessimism and uncertainty surrounding the law, which took effect last July and governs insurance policies for groups of up to 50 people.
"It's worked very well," said Miles Cole, director of business affairs of the Maryland Chamber of Commerce.
"For the majority of businesses in the small-group market, it has meant guaranteed access to health insurance products, generally at either lower or only marginally higher cost," said John Colmers, executive director of the state Health Care Access and Cost Commission.
The commission is still studying the impact of the law. By September it will have a sharper picture of how employers have responded and whether policies sold under the law are affordable for most workers. Employers are not required to pay for employees' health benefits.
Several insurance executives say that, based on their experience, the law has helped previously uninsured people obtain policies, a major goal of the legislation. But Mr. Colmers cautioned that the commission will not be able to measure any change in the state's uninsured population, which numbers 700,000 and includes many small-business workers. That would require a census, he said.
State legislators passed the law in response to a flood of complaints from frustrated small-business owners and their employees. Prices were skyrocketing, and many workers were excluded from coverage because of health problems.
Problems were much worse for small employers, who have less bargaining power and less ability to pay for health benefits than larger companies.
The insurance industry's behavior seemed odious to many people, but it was legal, until the General Assembly intervened.
Back to assuming risk
"The legislation set out to rewrite the ground rules of competition in this marketplace," said Mr. Colmers, "to make it more competitive and to return the business of insurance to the business of assuming risk rather than avoiding it. By and large, that has occurred."
Insurers no longer can refuse to cover people with health problems nor price policies on the basis of individuals' health histories. Now insurers set prices on the basis of the medical expenses of their total pool of subscribers, spreading around the risk and cost so that no worker has to pay exorbitant rates.
The law also requires insurance companies to offer the same comprehensive package of health benefits to all small businesses that want insurance.
Benefits include unlimited hospitalization, preventive services, medical equipment, rehabilitative care and prescriptions. Insurers offer these benefits through a health maintenance organization, which is the least expensive and most popular plan, and more expensive insurance policies requiring deductibles of up to $1,000 per family.
Requiring a standardized health policy has promoted competition by making it easier for employers to shop for the best price. Competition also has been enhanced by eliminating "pre-existing condition" contract clauses that allowed insurers to deny coverage to workers with known health problems.
Employers were often reluctant to switch insurers, even after a big price rise, because workers with health problems would be excluded by a new company.
Eliminating these barriers to competition has generated price-cutting among the more than 60 companies offering coverage to small businesses, according to several brokers.
Many get rate reductions
"I'd say the majority of clients have actually received rate reductions because of the reform," said Frank Kelly III, president of Kelly-Chick & Associates, a Hunt Valley broker and group insurance administrator.
Steve Salamon, a Pikesville broker, said 62 percent of his small-business clients are paying "comparable or lower premium rates."
Michael Fox, who owns Chesapeake Bay Outfitters in St. Michaels, said the law is saving him about $5,000 a year -- the difference between a policy that cost about $820 a month and one that now costs $430 to cover himself, his wife and their daughter.