Possible Effects Of Massachusetts Health Insurance Law On Small Businesses

Armen Hareyan's picture

The Massachusetts health insurance law, which took effect on July 1and requires all state residents to obtain coverage, has the potentialto "add costs to small businesses already grappling with difficulthealth care expenses," the Washington Times reports.

Underthe law, employers in the state with 11 or more workers must providehealth insurance for employees or pay an annual fee of $295 per worker.Laurie Felland, lead author of a recently released report by the Center for Studying Health System Changethat examined the effect of the law on small businesses, said, "It isvery early in the process, but we are not sure how the small-employercommunity is going to react to these new requirements as they unfold,"adding, "The mandate for individuals to buy insurance could be whathurts them the most."

About two-thirds of uninsured stateresidents work at small businesses, "making those employers moresusceptible to an increase in health care costs as more people fall inline with the mandate to buy health insurance," the Timesreports. Felland said, "When these people want health insurance,they'll turn to their employer, and in turn, cost will go up," adding,"There is a concern about how prepared the small-employer market is forthis change."


According to a market analyst who spoke to the Timeson the condition of anonymity, the law "could amount to a slow bleed onsmall businesses that offer health insurance but have employees thathadn't, until now, taken advantage of it" (Lopes, Washington Times, 7/31).


The law "has set the state on a bold course to provide insurancecoverage to nearly all its residents," but "that achievement will behollow if there are not enough front-line doctors to meet the need," a Boston Globeeditorial states. According to the editorial, the state faced aphysician shortage before the implementation of the law, but the"problem will likely worsen now that thousands of newly insuredresidents will be seeking regular care."

The editorialconcludes that state and local health care providers "must look to allpossible measures, including an even bigger loan forgiveness program,if that's what it takes, to ensure that coverage really means care" (Boston Globe, 7/30).


Reprinted with permission from kaisernetwork\t\t\t\t\t\t\t

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