Health plan riles small businesses

At issue is cost for care of disabled children

By Kay Lazar
Globe Staff / May 13, 2010

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Small businesses are crying foul over a proposal they say would shift more health insurance costs onto them for the treatment of developmentally disabled children, a move they say runs counter to pledges from Massachusetts lawmakers to help ease employers’ staggering insurance bills.

At issue is a measure in the Legislature that would require insurance companies to absorb the cost of copayments and deductibles for physical and speech therapy and other services provided through a state-run early intervention program for children up to 3 years old. Until now, the state has funded co-pays and deductibles for the program, but officials say it faces a $10 million shortfall and can no longer afford to do so.

Businesses leaders say insurers would probably pass the added expenses — about $4 million — onto smaller companies.

Larger firms are typically governed by federal insurance law, they say, and not subject to such state mandates.

“How sincere is their desire to help small businesses, and how much do they really understand our plight?’’ said Jon Hurst, president of the Retailers Association of Massachusetts, a trade group that has lobbied lawmakers for relief from annual double-digit increases in insurance costs.

The association and 11 other busi ness and insurance groups sent a letter yesterday to Senate Ways and Means chairman Steven Panagiotakos, urging him to kill the proposal.

“When costs go up, employers bear the bulk of the increase,’’ the letter said. “Placing restrictions on cost-sharing for certain services runs counter to . . . the Senate’s efforts to provide relief to small businesses.’’

Panagiotakos said his committee has not decided whether to include the measure in the proposed state budget it will release next week, but he said he has heard from many colleagues who support the initiative.

“This is a serious budget gap, and we need to try to find a solution,’’ Panagiotakos said. “Over the past two years there are no good options, only bad or worse.’’

The Patrick administration has warned advocates for children that the funding shortfall is so severe that up to one-third of the 30,000 toddlers in the program would be left out.

Currently, families with developmentally disabled children are charged a fee, based on their income, to participate in the program. The Patrick administration has said those fees could go up by as much as 600 percent.

Advocacy groups developed a plan, approved by the House last month, that would cut the program’s shortfall nearly in half. It would raise fees more modestly, but would also require insurers to pick up the $4 million in patient co-pays and deductibles the state currently covers.

Senate Majority Leader Frederick Berry, a Peabody Democrat, is championing the initiative. He is expected to push for its passage when the Senate budget is released.

“Senator Berry has been a longstanding advocate for early intervention services, so he is supportive of this effort,’’ Berry’s chief of staff, Kerry Whelan, said yesterday.

Child advocates say if the measure ultimately fails, businesses would end up shouldering even higher costs, because families would seek treatment for their children elsewhere that would be more expensive than the state program.

Martha Levine, who runs an early intervention program on Cape Ann and is president of a statewide consortium of such programs, said the price of a typical state-run therapy session is capped at $77, while a similar session at a hospital clinic or doctor’s office would cost more than $200.

“The state’s early intervention program is extremely cost-effective,’’ Levine said.

Kay Lazar can be reached at

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