The country is looking to Massachusetts for answers when it comes to health care reform. So much so that the head of the quasi-public agency that oversees the law spends much of his time now appearing on radio and TV news shows.

As the only state in the union to have enacted near-universal coverage, it looks to be largely a success. Just about everyone is covered, thanks to a coalition of state, business, and provider communities coming together despite costs to all.

But owners of small businesses say they have taken the brunt of the cost for health reform, and the numbers support that. Spiraling double-digit premium hikes for businesses too small to negotiate with insurers are threatening to tear apart the system at the seams.

Lawmakers and industry advocates are looking for a patch, but the strain felt here in Massachusetts could be even heavier at the national level. That’s because congressional proposals mandate that businesses pick up a larger percentage of premium costs than is required in Massachusetts. The national proposals so far also include fines and penalties that look to be higher than the ones in the Bay State. Business owners here say that if the mandates and the punishments for running afoul of those mandates are increased, they won’t be able to hold on.

As President Barack Obama prepares to lay out his health care agenda for the nation Wednesday, he may want to take heed of what's happening in the one state with nearly universal health care.

Massachusetts lawmakers and industry groups are working to craft a stopgap measure to help small businesses survive the double whammy of the economic downturn and escalating health care costs.

Insiders say lawmakers fear that a failure to step in could result in a wholesale abandoning of health reform mandates by small business, throwing the system into jeopardy.

“The burden on small business is threatening the success of the health care reform law. It really is the fly in the ointment,” said Bill Vernon of the National Federation of Independent Business.

Small businesses have been banned from joining together to negotiate lower health care rates since 1996. Lawmakers decided then that association health plans, as they were known, created inequities within the small group market, in part because associations could exclude sicker members. Without access to group buying, small businesses have seen health care costs grow at a faster rate than larger insurance purchasers. Many small businesses now face yearly insurance hikes of more than 15 percent, and a small number are facing increases upwards of 35 percent.

“Small employers have already bought down to the lowest-level plans they can, and they have nowhere to go,” said Marylou Buyse, president of the Massachusetts Association of Health Plans. MAHP has introduced a plan it says would reduce the costs of premiums by 22 percent for small businesses. A key tenet of the plan is that it would cap reimbursements to hospitals and doctors at 110 percent of Medicare payments. The plan design would match the Commonwealth Choice Bronze plan, which is the least-expensive option for individuals in the unsubsidized state-run plan.

The plan is not welcome news to the provider community, which is under increased financial pressures, including steep cuts to Medicaid payments. Medicare generally pays 90 percent of provider costs, so at 110 percent, the plan would just about cover costs. But Joe Kirkpatrick, vice president for health care finance at the Massachusetts Hospital Association, says this is cutting it too close because hospitals must maintain a 3 percent margin to be financially sustainable. He also questions the speed at which the proposal is moving forward. “How can the proposal be enacted in such a rapid time frame at a time when federal health reform is up in the air and payment reform in the state is up in the air?”

Democratic state Rep. Harriett Stanley asked, “What are we going to do, say to the little guy, ‘Just wait’?” She and Democratic State Sen. Richard Moore, the co-chairs of the Joint Committee on Health Care Finance, have filed the MAHP proposal as a bill in the Legislature. Stanley said small businesses are in crisis now and can’t wait the five to seven years she says it will take to implement the reforms issued by Gov. Deval Patrick's administration’s payment reform commission. In July, the commission called for an end to fee-for-services reimbursements to providers, instead favoring so-called “global payments,” which are fixed-dollar payments for the care patients may receive in a given time period. The bill filed by Stanley and Moore would sunset when those reforms go into effect.

The bill does appear to be gaining traction, as more and more stakeholders voice support. Jon Kingsdale, executive director of the Massachusetts Health Connector, which oversees the state-run health plans, has endorsed the plan, saying, “It’s the right medicine at the right time in the right place.” Kingsdale supports the proposal despite the fact that Connector launched its own small-business product in February. The Connector had hoped to enroll 100 small companies in the so-called contributory plan over an unspecified amount of time. So far, 47 have signed up. Connector officials said the two proposals do not conflict.

Democratic state Rep. Steven Walsh, who authored a different proposal that would allow small businesses to group together though a nonprofit board that would not exclude sicker patients, said he has no opposition to the bill. Walsh said he will continue to try to move his bill forward, but said, “I have no pride of ownership. Any plan that works is good with me.”

The Patrick administration set up a working group last month to come up with its own small-business health care solution. The panel will decide on a number of proposals, which could include administrative as well as legislative fixes. There is no timeline for delivering recommendations to the governor. But Barbara Anthony, undersecretary for consumer affairs in the Department of Housing and Economic Development, said the administration appreciates the urgency of the situation. When asked about whether she worried that beleaguered small businesses might drop health coverage altogether, Anthony said, “We’re all concerned about small business, who have stepped up to the plate with health reform, and we want to prevent that sort of thing from happening.”