AB 1672 - private business addressing public concerns.

It is a refreshing change to see private industry support legislation which will restrict that industry.

The Small Group Insurance Reform bill AB 1672 (Margolin) will become effective July 1, 1993. This bill was introduced as part of an insurance reform measure, in an effort to enable more Californians to obtain health insurance. It was supported by responsible health insurers. What is most refreshing is that the health insurance carriers didn't introduce legislation directed at other participants in the health care industry and continue "business as usual" for themselves. This law contains major provisions that will force all carriers to "manage risk" opposed to "avoid risk."

What will this bill mean to groups (businesses) of 5-50 employees? The answer is: groups of 5-50 employees cannot be rejected or non-renewed for health insurance for reasons of health, occupation or location.

In order to stabilize rate increases, rate bands will be imposed to restrict the insurers' ability to raise rates beyond a specific amount.

Imposition of pre-existing condition clauses will be restricted to a one-time, six month exclusion as long as health insurance coverage is maintained continuously.

This bill won't cure all the woes of the health care industry, but this is an example of an industry (health insurers) restricting itself for the protection of the consumer.

More can be done to make health care more affordable for everyone. All of the participants in the health care industry should take time to sit down and examine themselves, to see their role as a part of a larger picture and then introduce and support reform to correct the wrongs. As a result, there will be reasonable, affordable health care in this country. It can be done.

The workers' compensation system in California is a national disgrace and another example of a system in need of reform. Assuming that the majority of the professionals contributing to this debacle are embarrassed by the situation, now is the time for them to band together to produce meaningful reform.

Businesses are moving out of state in record numbers and as they move on, so does California's tax base. The high cost of doing business in California with workers' compensation, health insurance for employees and government sponsored environmental mandates, is driving California's businesses elsewhere. It's up to private industry to reform itself, so consumers will be protected and private industry can survive.

It is during these tough economic times that we all need to challenge ourselves. We need to make sure we add value to our society. If private business does not address public problems, the public will provide the solution which might be unfavorable to private business and in the end, the public itself.

Now is the time for all industry and related special interest groups to conduct self examinations in light of the bigger picture, get involved in reform, and correct these public concerns. Because they concern us all.

David Ludwig is Senior Vice President, Consumer Services Group, for Blue Cross of California.