Posted July 14, 2009 09:15 AM
By State Senator Scott Brown
Guest Columnist
Small businesses operating in the Commonwealth today face a very real problem with regard to obtaining affordable health insurance coverage in that they are strictly prohibited by law from banning together to take advantage of group purchasing. Better rates and buying clout in the marketplace can be achieved through strength in numbers in much the same way that cities and towns were granted permission a few years ago. This method is considerably cheaper and gives them more bargaining power, which would allow them to compete with larger companies for the best rates. In order, for small business to negotiate as a group, a state law must be changed and I am in support of this venture.
House Bill 3452, An Act Relative to Small Business Health Insurance, filed by Representative Steven Walsh (D-Lynn) would allow small businesses with 50 or fewer employees to organize nonprofit groups for the purpose of purchasing insurance for their employees, similar to the Group Insurance Commission, which allows towns and cities to purchase insurance collectively, but leaves out small businesses. This would give small businesses the advantage of negotiating for group premiums which would allow them to obtain the best possible rates on health insurance. The overwhelming majority of Massachusetts businesses, about 87 percent, have fewer than 20 employees. This means that there are about 724,000 workers who do not have access to the most affordable health insurance and this figure does not take into account businesses which would still meet the bill’s criteria of less than 50 workers.
A 1991 law previously allowed businesses to buy health insurance from trade associations and gave those associations some privileges in regulating and limiting health coverage; however, this only applied to larger businesses while others were left to pay significantly higher premiums. The new bill is a significant improvement because it contains no exemptions and gives the state insurance commissioner the authority to regulate and oversee the new small-business health plan, rather than the trade associations.
The law was repealed in 1996 and a modified version of it was rejected in 2005. After the law was amended, trade associations and chambers of commerce were relegated to being tools for businesses to more easily find health insurance providers, without providing any discount or other benefits. A small business would receive the same insurance rate whether or not they purchase their health insurance plans through these organizations.
When looking at who may have been left out, or may not have been a winner, in the state’s health reform law, it is evident that it was small businesses. If we are committed to providing the residents of the Commonwealth with affordable access to health insurance, then it is senseless to allow a law to remain on the books that prohibits over 700,000 workers access to cheaper health insurance. The passage of this bill would give small business owners, who make up the majority of Massachusetts businesses, the ability to compete with large corporations and would provide discounted health insurance to a substantial amount of workers and their families.
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House Bill 3452, An Act Relative to Small Business Health Insurance, filed by Representative Steven Walsh (D-Lynn) would allow small businesses with 50 or fewer employees to organize nonprofit groups for the purpose of purchasing insurance for their employees, similar to the Group Insurance Commission, which allows towns and cities to purchase insurance collectively, but leaves out small businesses. This would give small businesses the advantage of negotiating for group premiums which would allow them to obtain the best possible rates on health insurance. The overwhelming majority of Massachusetts businesses, about 87 percent, have fewer than 20 employees. This means that there are about 724,000 workers who do not have access to the most affordable health insurance and this figure does not take into account businesses which would still meet the bill’s criteria of less than 50 workers.
A 1991 law previously allowed businesses to buy health insurance from trade associations and gave those associations some privileges in regulating and limiting health coverage; however, this only applied to larger businesses while others were left to pay significantly higher premiums. The new bill is a significant improvement because it contains no exemptions and gives the state insurance commissioner the authority to regulate and oversee the new small-business health plan, rather than the trade associations.
The law was repealed in 1996 and a modified version of it was rejected in 2005. After the law was amended, trade associations and chambers of commerce were relegated to being tools for businesses to more easily find health insurance providers, without providing any discount or other benefits. A small business would receive the same insurance rate whether or not they purchase their health insurance plans through these organizations.
When looking at who may have been left out, or may not have been a winner, in the state’s health reform law, it is evident that it was small businesses. If we are committed to providing the residents of the Commonwealth with affordable access to health insurance, then it is senseless to allow a law to remain on the books that prohibits over 700,000 workers access to cheaper health insurance. The passage of this bill would give small business owners, who make up the majority of Massachusetts businesses, the ability to compete with large corporations and would provide discounted health insurance to a substantial amount of workers and their families.
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State Senator Scott Brown (R-Wrentham) represents the Norfolk, Bristol, and Middlesex District, which includes Needham and precincts B, F and G of Wellesley along with several other communities.
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