A common-sense proposal to give small businesses a break on their health insurance bills fell victim last week to the contentious House budget debate.
Rep. Steven Walsh, D-Lynn, filed an amendment that would have removed the ban on businesses banding together for the purpose of purchasing health plans for their employees. But with individual members pestering for all sorts of add-ons ranging from the rollback of the sales tax to the reinstitution of the death penalty, the leadership decided to sharply limit the number of "outside sections" that would be allowed.
Fortunately, that does not mean the end of Walsh's proposal, which was also filed as a separate bill.
It's hard to figure what the Legislature was thinking when it decided to outlaw most group purchases of health insurance in the mid-1990s. Perhaps health insurance carriers were held in higher esteem back then, making it easier for the industry's lobbyists to block any legislation that would reduce costs and their clients' profits.
Since then companies like Blue Cross Blue Shield, Tufts and Harvard Pilgrim have become the favored targets of those, including President Obama and Gov. Deval Patrick, seeking to expand coverage without increasing costs.
We would much prefer to see action taken to bring more competition into the market than impose arbitrary price controls such as Patrick announced earlier this year. Walsh's bill would accomplish that.
A recent Boston Business Journal story illustrated the power of group purchasing. It found that while members of the Retailers Association of Masschusetts reported average annual premium increases of 14.6 percent over the past five years, the average increase for banks purchasing their insurance through the Massachusetts Bankers Association was half that — an average of 6 to 7 percent. (The bankers' plan was exempted when the ban on group purchasing was enacted. Better lobbyists?)
According to the BBJ, "The insurance industry is less than keen on the idea of increasing group buying power for small businesses." No surprise there.
But owners of small businesses, who as a group are the backbone of this state's economy, will tell you that skyrocketing premiums are forcing them to reduce benefits — if they can afford to provide health insurance to their employees at all — and/or reduce staff.
We hope Walsh continues the fight for his bill and would urge other members of the North Shore delegation to get on board. The problem consumers are experiencing today with the cost of health insurance isn't the result of too much competition, but too little; and any effort to give small businesses more clout in dealing with the few companies offering these plans in Massachusetts, ought to receive serious consideration.
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