Why Does Small Biz Pay More for Health Care?

Small firms warn politicians that they need to be mindful of the impact health reform will have on business.

In Massachusetts, which has universal health care, some small businesses say double-digit insurance-rate increases threaten to shut them down. The problem is so severe, Governor Deval Patrick will announce today a plan that would give his insurance commissioner more authority to review rates for small businesses before they are implemented, the Boston Globe reports.

As part of Massachusetts' 2006 health reform law, businesses with at least 11 full-time workers have to cover those employees or pay a fee. Reform legislation in Washington has similar mandates for employers, though not for such small businesses. In the national debate, businesses say market reforms are necessary to stem rising costs.

Part of Patrick's plan is to figure out why small businesses pay considerably more than big firms, the Globe reports. The governor's proposal will need to pass the legislature.

A recent survey by the paper found insurers in Massachusetts will raise premiums as much as 12 percent next year. The state's biggest health plan, Blue Cross and Blue Shield of Massachusetts, with 2.5 million members, estimates its average premium rates will rise 10 to 11 percent.

For its part, an insurance group official says the industry is being made a scapegoat.

“This is the wrong prescription for health care,’’ Marylou Buyse, president of the Massachusetts Association of Health Plans, tells the Globe. “The governor’s proposal misses the mark, and it fails to get at the main drivers of health care costs and that’s the rates that doctors and hospitals are charging for their services.’’

Sounds like the debate going on nationally.