CONCORD – Gov. John Lynch won a victory on the health insurance front today when the House approved final passage of a plan aimed at lowering premiums for small business.

The House voted 259 to 93 to pass Senate Bill 540, which follows recommendation by the governor's Citizens Health Initiative. It calls for a commission to develop a new health insurance plan by Fall 2009 that will save businesses with 50 or fewer workers an estimated 15 percent on their health insurance costs.

The HealthFirst plan will emphasize prevention and managed medical care, with the kinds of cost-saving incentives that are usually available only to larger companies.

The bill states that the insurance plan will be priced at 10 percent of the state's median wage, roughly $262 a month. The House added an insurance actuary to the plan design committee, to help make sure that the program matches the price limit in the bill. The plan will also include a set cap for a person's out-of-pocket medical expenses.

The bill calls for the committee to finish its work and for the product to be available to consumers by Oct. 1, 2009.

If one company agrees to offer the HealthFirst plan, then all insurers that cover 1,000 or more people in the state would be required to offer it, and to present it as an option to all small businesses.

The bill requires the plan to be updated every three years by an advisory committee that includes lawmakers and small employers.

It would be illegal for an insurer to market a plan with similar benefits that is aimed at undercutting the HealthFirst plan.

House Commerce Committee chairman Tara Reardon, D-Concord, noted that the bill was strongly supported by small business. One business owner broke down in tears during a committee hearing as he described his struggle to continue offering his workers coverage, she recalled.

Without an affordable plan, the number of uninsured workers will climb, Reardon said, adding, "The alternative of fewer people being covered is not acceptable."

Because the bill adds an actuary to the plan committee, the Senate will have to sign off on the House version. The Senate passed the bill 21-3 in March.