Health insurance costs limiting to small businesses

Release Date: 7/29/2004

Page 2 of 2 -- ''We'd like to have more leverage in negotiating [premiums]," she said.

But opponents of the plan say it would upset the balance of the current small business insurance system and result in even higher premiums for small companies.

Dr. Marylou Buyse, president of the Massachusetts Association of Health Plans, said that if small businesses began joining associations for their health care, those left out would have exorbitantly high rates.

In addition, she said, associations could be faced with unpredictable high rates. If a few employees of one company were very sick or old and drove up premiums, she said, then other small businesses within the association would be forced to pay the same high rates.

''We're all concerned about the cost of health insurance," said Buyse, ''but it reflects the true cost of health care. This bill won't do anything to address the factors causing the high costs."

When Comolli looked to the Milford Chamber of Commerce for a small business health plan last month, she was shocked by the premiums, she said, which ranged from $616 a month for a very limited plan to $1,176 a month for a more comprehensive one.

In the end, she settled on an individual plan from Blue Cross Blue Shield that will cost her $615 a month for her and her daughter -- her largest business expense. And while her strategy might work for herself and the legions of other self-employed people, companies with more than one employee that want to offer health benefits don't have this option.

According to the 2003 state study, 98 percent of employers with more than 50 employees offer insurance benefits, but only 66 percent of those with fewer than 50 employers do. Barry Feingold, president of the Milford Chamber of Commerce, said that he sees the high cost of health insurance preventing many small businesses from offering full-time jobs with benefits to their employees.

''Insurance is a tremendous strain on the budget," he said, ''so even if business is going well and they want to hire another person, often they can't do it. That's why you see so many part-timers. You want to hire people who are more qualified and more committed to your business, but it kills you on the insurance."