Health-care reform: Is it right for you?
By christina p. o’neill
Massachusetts’ new health-care insurance law is supposed to level the playing field on who has coverage and who doesn’t. It’s supposed to make it easier for individuals to access portable health insurance through their employers, empowering individuals to make their own choices and increasing individual responsibility. But small employers aren’t buying this medicine just yet.
Bill Cavanaugh owns and operates Worcester-based C. C. Lowell Co., one of the country’s oldest independent art supply stores. He has five full-time employees and three part-timers, placing the company below the 10-employee threshold of the state law’s purview. C. C. Lowell offers health insurance to full-timers working 32 hours a week or more, and pays half the cost. Premiums have risen roughly 20 percent over the last two years, Cavanaugh says. But the small company is bracing for an additional hit on its insurance costs now that Cavanaugh, who no longer has spousal coverage through his wife’s job, is joining its group of insureds.The company has already taken reduced-benefit coverage this year to make the plan more affordable, he says. But he expects premiums for the group of relatively younger employees to rise because of his age.
As it stands today, he says, spousal plans may or may not be available for people who work in small companies, "but there’s never any definition or protocol to determine where primary insurance should come from." He’d like to see the introduction of Association Health Plans, which are now illegal in Massachusetts. These plans are large groups consisting of many small employers, which have better bargaining power with insurers.
Cavanaugh says one good thing about the state plan is that it will require more small businesses to offer access to health-care coverage. He disagrees that mandatory access places a business at competitive disadvantage; employers who offer it can keep better people, he says.
David Didricksen is the owner of Willow Books and Café in Acton. He has 25 employees, two-thirds of whom are part-time, working less than 20 hours. While he offers health insurance to full-timers, "I don’t have a lot of takers because it’s so expensive."
Willow Books and Café pays double the rate expected from a larger company with the same workforce demographic, Didricksen says. While he agrees that everyone who gets access to health-care coverage should pay to the limits of their ability, he says what’s missing is a similar requirement of commitment by insurers and providers.
He dismisses the notion that the state’s health-care costs are high because small businesses don’t offer insurance. "That’s clearly the implication of the legislation that somehow it’s all our fault," he says.
The devil will be in the details. The state’s newly-minted Health Insurance Connector, headed by ex-Tufts Senior Vice President Jon Kingsdale, must develop insurance plans for Bay Staters earning less than 300 percent of the federal poverty level by October 1, the start of the next fiscal year in the health-care industry. It must also set policy on how to insure nearly all Bay State residents by July 2007. The insurance products have yet to be designed.
Christina P. O’Neill can be reached at coneill@wbjournal.com
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