Wednesday, June 07, 2006
The price of Maryland's small business health insurance coverage rose by 5.5 percent last year, the second-straight year in which the plan's cost stayed above a state-set limit.
The rising cost of health insurance for small companies in Maryland, explained in a mid-May report by the Maryland Health Care Commission, which regulates the state-designed advantage package, is bad news for companies that continue to struggle with soaring health care bills.
"They're at wit's end," said Milton Hall, principal with Human Capital Consultants LLC, an employee benefits consulting firm in Columbia. "They just don't know what to do in terms of health care."
But state officials are confident that new regulations, effective July 1, would slow the pace of increases in health care costs for these small companies. According to the statement, the average cost of Maryland's basic small business health insurance table in 2005 was $4,573 per employee, up from $4,335 per employee the year before.
The plan is a smallest amount set of benefits that companies with two to 50 employees should offer if they provide health insurance to their workers. Most employers add coverage further than the basic levels. The state requires that the price of a basic benefit package remain at underneath 10 percent of the average Maryland wage, or $4,439 last year.
State health care officials also expect these changes would reverse a trend of declining enrollment. The percentage of companies that contribute in the small group advantage plan declined from 42 percent in 2004 to 40 percent in 2005, according to the report. The number of people enclosed by the benefit package also decreased to 448,000 last year, down from 452,000 in 2004 and a peak of 489,000 in 1995. .
"We're seeing greater choice of benefit design and hopefully some early signs of increased competition," said Dr. Rex Cowdry, executive director of the health care commission. The state hopes to bring the cost of the basic plan below the cap next year.
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