The Utah Insurance Department wants a legislative committee to focus on small-business health-care issues this year.

But Kent Michie, commissioner of the department, told the Business and Labor Interim Committee that the issues are numerous and broad.

"Health care is, or ought to be, the No. 1 domestic policy issue facing the nation, and so many, many legislatures and nearly 94 percent of the governors ... think that health care is one of the major issues out there," Michie said.

The department wants lawmakers to look at how to develop a basic health insurance product for smaller employers and their employees that is affordable and not subject to the traditional mandates, to study and identify the most effective health insurance programs for small businesses that share actuarial risk broadly, and to study health insurance mandates and their effects on small businesses.

With 2008 featuring a presidential election that may bring health-care issues into "quite sharp focus," he said, the department suggests holding off on comprehensive health-care reform until that year. However, it does want the legislative auditor general to complete a comprehensive professional study of the nature of the problem and possible solutions.

The two main troubles are "runaway inflation in health-care costs" and a "system that is stunningly inefficient," he said.

Michie said the Legislature faces the question of whether to address health-care matters in small steps or doing something "bold." Committee co-chairman Rep. Stephen Clark, R-Provo, said he preferred the bold option but acknowledged that the issue may be one for the federal government.

Michie said the state is funding a study about uninsured Utahns — estimates put the figure at 300,000 to 400,000 people — but he said having so many uninsured is "a symptom of the problem."

Rep. Jim Dunnigan, R-Taylorsville, discounted the idea that "magical rates" for premiums would result through systems aggregating a large number of businesses. He cited an example showing how some businesses would get lower rates while others would have to pay more — doing nothing to control health insurance costs or the claims paid out.

"You're still going to have the same claims, the same sick conditions. It does nothing except shuffling the dollars and asking others who aren't paying quite so much to pay a little more to lower my rates. So there's a misperception that large corporations have the best health-care rates. The best health-care rates available are to healthy small businesses and to healthy individuals," Dunnigan said.

One solution to lowering premiums would be to allow insurance carriers to provide discounts for healthy behavior, such as stopping smoking, controlling diabetes and having good height-to-weight ratios.

"We don't allow them to do that," he said.

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E-mail: bwallace@desnews.com