Businesses Offer Their Own Cost-Slashing Plan For Employers

The Associated Industries of Massachusetts, a trade group for businesses in the Commonwealth, proposed a new plan to control health insurance costs, and ease the financial pressure on small businesses, at a legislative hearing on health care financing Wednesday.

AIM President and CEO Rick Lord explains some of the details on his blog — but given the new restrictions he lays out, the proposal certainly won't make him popular among docs and hospitals:

The AIM proposal calls for regulators to limit - temporarily - reimbursements to doctors and hospitals to the median cost for individual medical services in 2009. The proposal would also establish requirements for health insurance companies, which would be required to offer low-cost plans with reduced networks of providers, and could not spend more than 10 percent of consumer premiums on administrative costs.

A moratorium on new health-insurance mandates and "rate shock bumpers" for small employers and individuals are also part of the initiative.