HEALTH COST increases are hurting just about everyone, but especially owners of small businesses with aging employees. State Senate President Therese Murray yesterday followed up on Governor Patrick’s rejection of high insurer rate increases with a reform package that should at least slow the annual premium hikes that are strangling many retailers and other small businesses.
Under Murray’s plan, insurers would have a choice: either commit to spending 90 cents or more of every premium dollar on medical services and not administrative costs, or keep premiums under the medical rate of inflation. Her plan would also hold down costs by limiting the freedom of individuals to jump into and out of plans when they face costly procedures. She would require insurers to come up with low-cost, limited-network plans and have the state establish a reinsurance pool for the small-business and individual market.
These are all sensible lifelines to small businesses. Missing from Murray’s plan, though, is the governor’s proposal for legislative authority to hold down the rates that hospitals and doctors are getting. Business owners will get minimal relief on their premiums if their insurers succeed in curbing their administrative costs, only to confront ballooning levels of reimbursements for providers.
Murray acknowledges Attorney General Martha Coakley’s finding that rising hospital and doctor prices are driving up overall health costs, but puts off addressing them. Murray envisions an independent review of contracts between insurers and providers to make sure they “provide value to businesses and health care consumers statewide.’’ In the meantime, she is looking to providers for $100 million in contributions for the immediate and direct benefit of small businesses. Partners HealthCare has kicked in $40 million. It’s a positive gesture, but struggling small businesses need a lot more help — from insurers and hospitals.