One of the priorities of the Legislature and Gov. Tom Vilsack this year is to help small businesses cover the cost of health insurance for employees.
The goal may be the same, but Vilsack, a Democrat, sees different ways to accomplish it and pay for it than Republican legislative leaders.
Vilsack has proposed a $50 million plan that would help small businesses pay the cost of health care insurance for workers.
Using money from a proposed 80 cent increase in the state's cigarette tax, he would create "a reinsurance program that would allow insurance premiums for small businesses to be reduced and certainly not to be increasing at the rates they have been increasing in the last several years."
The program would subsidize health insurance coverage for businesses with 25 or fewer workers and for school districts.
The coverage could be used for catastrophic illnesses or could be targeted to diseases that are driving health costs higher. Vilsack said he is working with state insurance officials and the industry to define the type of reinsurance that could be offered.
He included schools in the program, saying many districts spend new money given to them each year by the Legislature to keep pace with the growing costs of benefits, including health insurance, instead of improved teacher pay and other educational programs.
Republican legislative leaders proposed their own plan that would have the state pay for catastrophic coverage and would make it easier for businesses and associations to form insurance pools to reduce costs.
Included in the package would be tax incentives for businesses to offer coverage, and expansion of incentives for individuals to create health savings accounts.
Lawmakers said they are getting pressure from voters because of soaring health insurance costs for companies and individuals. They cite a a Kaiser Family Foundation study that shows employer contributions to health coverage increased by 65 percent between 2000 and 2005, while the employee's share has gone up 81 percent. The study also indicated that more small businesses are dropping insurance as a benefit for employees.
Vilsack's approach must overcome a major hurdle. Republican lawmakers said they have no plans to consider an increase in the cigarette tax.
"I don't see the need or the movement to make that happen," said House Speaker Christopher Rants, R-Sioux City.
Last year, lawmakers rejected Vilsack's proposal for an 80-cent increase in the tax charged on each pack of cigarettes sold.