Small firms pay more on health care, data say
State to hold hearings on rate disparities
New data compiled by the state show small businesses and their employees are frequently charged more for the same health insurance coverage than large employers and their workers - a practice small business owners said they long suspected but could never prove.
The numbers show that this was especially true for plans sold by the state’s largest insurer, Blue Cross and Blue Shield of Massachusetts, which charged smaller companies between 9 and 10 percent more than large businesses this year for the same products. Harvard Pilgrim Health Care, the state’s second largest insurer, charged between 2.9 and 8.3 percent more.
The Massachusetts Division of Insurance released the data as it scheduled a series of public hearings, starting Monday, to seek comment on changes to help make coverage more affordable for small employers. On Nov. 9, the division said it intends to launch at least six weeks of hearings to directly question insurance executives about the health premiums they charge to small businesses
“Hopefully, we will get some solutions out of this,’’ said Jon Hurst, president of the Retailers Association of Massachusetts, whose members are mostly small businesses. “We feel that we have been subsidizing other folks.’’
Blue Cross spokesman Jay McQuaide said the insurer “welcomes a conversation about the major drivers of premium increases.’’ While the rates Blue Cross charges small companies are substantially more than their larger counterparts, he said that the state’s numbers also show that Blue Cross prices tended to be lower across the board than most of the other insurers, including Harvard Pilgrim.
Small-business groups have been lobbying for the right to band together to negotiate cheaper prices, something prohibited by a 1996 state law. But trade associations representing larger employers and the state’s health insurers have fought that push, saying it could raise prices for other consumers because of complex changes made during the state’s groundbreaking 2006 health insurance overhaul. Those changes were aimed at making coverage more affordable for people who buy insurance on their own.
The 2006 law required nearly everyone to buy health insurance or pay a penalty. It also required businesses that employ more than the equivalent of 11 full-time workers to offer coverage or also face penalties.
A year after the law took effect, coverage costs declined an average of 15 percent for some individuals, but rates for small businesses rose by about 1.5 percent, according to state data.
Georgia Maheras, private market policy manager at Health Care For All, a large consumer group, said it applauds the state’s efforts to provide “transparency and accountability’’ to the insurance premium process and hopes it translates to more cost-savings for residents.
“We have long asked for a public process that shows people where their health care dollars are spent,’’ Maheras said. “For years, insurer premium increases have been approved by the Division of Insurance without this public process.’’
Kay Lazar can be reached at klazar@globe.com. 
