Last December, the state's Division of Insurance certified two groups - the Retailers Association of Massachusetts and the Massachusetts Association of Chamber of Commerce Executives - as group purchasing cooperatives for health insurance.
And this month, several chambers - including Worcester Regional, Corridor Nine, Marlborough Regional and Blackstone Valley - announced that businesses with 50 or fewer employees can obtain a three-percent discount on coverage options offered by Fallon Community Health Plan and Harvard Pilgrim Health Care through the Chamber Health Co-Op.
Many people who own or manage small businesses are wondering if this and other co-ops are really a good deal.
At this point, a number of questions have yet to be answered:
- Are there any trade-offs for the discount?
- What impact will these new health insurance co-ops have on quality as well as costs?
- What effect will additional administrative expenses have on costs?
- What kind of experience ratings will these co-ops produce?
- Will they attract sufficient members to achieve the economy of scale necessary to put downward pressure on rates?
At Mid-State Insurance, we will continue to monitor events as they unfold. In the meantime, there are ways for businesses to gain some control over rising health care costs. Earlier this year, I wrote a blog about the importance of promoting wellness by providing education and programs that encourage employees to adopt healthy lifestyles. I consider wellness programs a great example of a win-win policy - one that offers benefits to both businesses and their people.
If businesses are concerned about the rapid rise in health care costs, so too is the medical community. Last year the Center for Disease Control and Prevention noted that the cost of insurance premiums and employee medical claims is at an all time high - and rising. The CDC reports that each year in the U.S., chronic illnesses such as heart disease, stroke, cancer and diabetes cause 7 in 10 deaths and account for about 75 percent of the $2 trillion spent on health care.
Locally, Dr. Michael Hirsh, interim Commissioner of Public Health for the City of Worcester, calls prevention the key to both good health and lower medical costs. In an interview with Lee Hamel of the Telegram & Gazette, he said that "almost all of the data has been showing that if you can prevent people from becoming ill in the first place you spend much less money overall on health care costs."
As an independent broker, Mid-State Insurance will continue to offer our clients information, advice, and the option of purchasing health insurance through associations, health insurance carriers, and co-ops. In the meantime, we encourage both individuals and businesses to make choices that promote wellness and prevent illness. The rewards will be reflected in healthier lives as well as a stronger bottom line.