News & Events

Healthcare bill would cut costs to small firms (MS)

Massachusetts health insurers yesterday offered a plan they say will help make healthcare coverage more affordable for small businesses.

Senator Richard T. Moore, Democrat from Uxbridge, and chairman of the joint Committee on Health Care Financing, along with other state representatives and the Massachusetts Association of Health Plans, introduced legislation they say can cut the cost of premiums by up to 22 percent.

The plan – scheduled to be filed later this week – would allow businesses with 50 or fewer employees, and self-employed individuals, to buy basic medical coverage with lower upfront costs and higher out-of-pocket expenses.

Healthcare providers would be reimbursed a maximum of 110 percent of the Medicare rate for services, which would translate into lower premiums for small businesses, said Dr. Marylou Buyse, the president of the Massachusetts Association of Health Plans, an industry group. It would also cap at 2 percent the profits insurers could make from small businesses, Buyse said.

Business groups, including the Smaller Business Association of New England and the Worcester Regional Chamber of Commerce, said they support the legislation.

“Healthcare costs are the second- highest cost a small business faces, after salaries and wages,’’ said Michael Lanava, business resource manager for the Worcester chamber. Nearly all of the chamber’s 3,000 members have fewer than 50 employees, and many have fewer than 20.

Statewide, 724,000 workers are employed by small businesses, according to state figures.

“This is the first time small businesses would be receiving any relief,’’ Lanava said.

The bill follows legislation filed earlier this year by Representative Steven M. Walsh, a Lynn Democrat, that proposed to let small businesses band together to negotiate better rates with the health insurers.

The Massachusetts Association of Health Plans opposed the bill, saying it would not allow self-employed people to join the consortium, causing them to pay more for health coverage.

The plan presented yesterday won’t come close to solving the healthcare crisis, said Dr. Mario Motta, the president of the Massachusetts Medical Society and a cardiologist at Salem Hospital.

“The main problem is that it’s based solely on cutting rates to physicians and providers,’’ said Motta. The society, which represents physicians statewide, favors a public healthcare plan, he said, but the new proposal does not address the deeper problems of the system.

“Every year, physicians are breaking even or lose money on Medicare,’’ said Motta.

To base more payments on Medicare rates would drive primary care physicians out of business, he said.

Tim Gens, executive vice president of the Massachusetts Hospital Association, also criticized the plan, saying Medicare rates are in constant flux and hospitals are under increased economic pressures.

Buyse, the health plans group president, said the proposed legislation would just be one option offered to small businesses, making the financial impact on healthcare providers minimal.

Tara Ballenger can be reached at