Health insurance costs are set to explode once again in early 2010, and we've read the horror stories in recent reports about small businesses being hit with increases of as much as 47 percent.
As convincing as health insurance companies are in their justifications, such increases are no less outrageous. So, it was a bit of a surprise to us that not a single small business owner showed up for a hearing held at Worcester State College by the state Division of Insurance. The hearing was run by Joseph G. Murphy, the state's acting commissioner of insurance, and was designed to give businesses an opportunity to voice their concerns about the rapidly rising cost of health care. The division, it seems, would like to do something about that.
About 20 people showed up, mostly representatives of the state legislature, insurance brokers and small business advocacy groups like the state chapter of the National Federation of Independent Businesses and the Small Business Service Bureau Inc.
And while these organizations made some very well-informed, convincing arguments on behalf of their constituents, they lacked the kind of guttural fury that can only be mustered by a stressed-out small business owner.
"Addressing the cost of health insurance is the great unfinished business of the Massachusetts health care reform experiment," said Bill Vernon, state director of the NFIB. "The affordability issue was avoided three and four years ago because it required difficult choices."
He's right. But at the hearing, he read those lines in a calm, inoffensive manner.
The cost of covering newly insured, high-risk individuals that are required to be covered under the state's universal coverage law, combined with lower reimbursement rates from programs like Medicare and Medicaid have prompted money-losing insurers to make up the difference by charging more.
Insurers say they expect to raise premiums by an average of 10 percent in 2010, but the most severe increases will be felt by small businesses, which do not have the bargaining power of the state's larger employers.
The Small Business Service Bureau reported that 64 percent of its members absorbed health insurance cost increases between 10 and 20 percent in 2009. The prior year, 61 percent of its members reported increases of up to 10 percent.
Family plan premiums for Small Business Service Bureau members have doubled in less than 10 years and currently average $15,000 per year and reach as much as $22,000.
Could it be that small business owners want it that way? Is it possible that being faced with a 20, 30 or 40 percent increase in insurance costs just isn't that scary to small business owners?
We doubt it. And we regularly hear Massachusetts called "unfriendly" because of the high cost of doing business here, and health care is chief among the culprits.
Small business owners in the Worcester region missed an opportunity to express their displeasure with the state's health insurance situation. And without their testimony, we fear that the Patrick administration will fail to realize what it's like to be a business on the edge, and what it's like to have been put there in part by an administration so keen to take credit for an insured rate near 100 percent that it put aside concerns about cost and who would bear the brunt of those costs.
Small business needs to find its large voice on this issue, and fast. Political pressure only works when the heat is put on the system — and there was little heat in the room last week for the commissioner of insurance to feel.