A missed opportunity to fix small business insurance

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Small business insurance has been a mess in this state for a while. The health care reform act of 2006 was supposed to help make it work better. It did not.

Julie Donnelly of the Boston Business Journal notes that Fallon and some other insurers in the state are seeing the small business market as costing them a lot of money. And they could pull up stakes.

That might be the “nuclear” option as Fallon put it, but the sad thing is that the governor could have taken a different approach from his current “wallpaper” policy. Patrick circa 2010 is saying essentially who cares about the cost of health care, let’s set the price. That is akin to someone who has a giant leak in the wall insisting to the building contractor that they leave the hole in the wall alone but keep fixing the wallpaper so no one can see it.

The administration could have done what the MA health care reform law called for: creating options, real options, for small businesses in addition to helping the indigent get care. But not until the Pioneer paper in January called the Connector out for doing nothing on small business did the Connector change its tune.

As Donnelly reported on March 15:

The Connector, which has held premium rate hikes to under 5 percent for Commonwealth Care, the state’s subsidized plan, has just launched a product for small businesses called Business Express. The agency was tasked with developing such a program when Massachusetts health reform was enacted in 2006. Last year it launched a pilot product called the Contributory Plan, with a goal of signing up 100 small businesses. Sixty-five small businesses did sign up, but the Connector is now suspending the product in favor of the new plan.

This renewed focus on small businesses only occurred after the release of Pioneer’ s report Drawing Lessons, which compared the Connector to Utah’s Health Exchange. In Utah, the focus has been on small businesses and they have provided dozens of options and leveraged the broker community to educate and market insurance products. Instead, the Connector insists on reined in products and competition, and they have failed to meet small business demands.