Study doubts healthcare bill

A new study has intensified a bitter debate about a bill pending in the state Senate that is intended to lower the cost of health insurance by letting small businesses band into larger, more competitive buying pools.

The study, sponsored by a trade group for Massachusetts health insurers, found that such pools, called association health plans, would neither lower costs nor increase access to healthcare for employees of small companies.

Nancy Turnbull, a professor at Harvard School of Public Health who co-wrote the study, said the bill would unintentionally hurt employees' access to healthcare because association health plans would keep costs lower by signing up people who are healthy and thus have fewer medical expenses. Those with preexisting medical conditions could be excluded, Turnbull said, leaving them in traditional small-group plans with skyrocketing rates.

She said that would undermine a basic tenet of insurance: Large groups of people help absorb the expense of higher-cost members.

''We have a carefully structured and regulated system for small-group health insurance that's designed to broadly spread costs and prevent insurers from damaging practices such as cherry-picking," said Turnbull, a former official in the state Division of Insurance who helped craft some of the existing regulations.

The division oversees small-group coverage for companies with 50 or fewer employees.

Supporters of the bill, sponsored by state Senator Steven A. Baddour, Democrat of Methuen, said a revised version of the proposal specifically prohibits cherry-picking -- the selection of only healthier people to join association health plans. They say health insurers oppose the changes because they reap most of their profits from small businesses that are forced to pay higher rates.

''If this is such a bad idea, why do we allow it for large employers, state employees, cities and towns, and universities?" asked Jon B. Hurst, president of the Retailers Association of Massachusetts. ''Why can everyone do it except for small employers? We need to level the playing field."

Hurst contended that employees of small businesses pay family health insurance premiums that average $2,000 a year more than what employees of larger employers are assessed. Some of his members have been hit with annual rate increases as high as 50 percent, he said.

The study sponsored by the retailers maintains that a small-group health insurance purchasing pool would encourage roughly 4,000 businesses to offer insurance that previously do not, and would add coverage for about 25,000 previously uninsured workers and family members.

Supporters of the bill include the retailers group; trade groups representing mortgage bankers, dentists, convenience stores, and others; and numerous city and town chambers of commerce. Those opposed include health insurers, advocates for universal health coverage, and some business trade groups.

Jeffrey Krasner can be reached at krasner@globe.com.