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The bill would have the state help set up an insurance pool small entities could join.

Rep. Norm Rokeberg, an Anchorage Republican, said by joining together into a larger pool, the groups may be able to get a better deal on insurance than they could alone. He is sponsoring the bill.

"They need some glue to pull them together, a conduit to pull them together," Rokeberg said.

The state would fill that role by forming the pool and seeking bids from private insurance companies, he said.

Rokeberg said about 16,000 Alaskans may be without health insurance, partly because the price is out of reach for small businesses.

The Alaska Mental Health Trust Authority agreed to spend $90,000 on start-up costs for the pool, because most mental health services in Alaska are provided by nonprofit organizations. Ongoing costs would be covered in the premiums paid by participants, Rokeberg said.

Rep. Jeannette James, a North Pole Republican, supported the bill, but said she doesn't want to mislead people into believing it will result in inexpensive health care.

"It's going to be a very expensive proposition for the businesses as well as they people who are covered," James said.

Rokeberg agreed the bill is not a cure for rising health costs, but said it could help moderate the increase for small businesses and other small groups, and it's worth trying.

Rep. John Coghill, a North Pole Republican, expressed sympathy for those without insurance, but questioned whether the state should act as a "brokerage agent."

House Bill 315 now goes to the Senate for consideration.