Katie Holahan

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House Establishes Process to Study Health Assessment

Posted by Katie Holahan on Apr 10, 2017 1:08:24 PM

The Massachusetts House Ways and Means Committee wants the Baker Administration to examine the assumptions underlying its controversial proposal to have employers pay for a shortfall in the MassHealth program.

StateHouse-resized-600.pngThe proposed Fiscal Year 2018 budget released by the committee today would create a six-month review of the $2,000-per-employee “Fair Share Assessment” that the administration included in its own budget proposal in January.

The House plan would require the administration to conduct public hearings and determine the potential effect of the assessment on small business. It would also limit the definition of a full-time employee in any assessment by excluding temporary and seasonal employees.

Perhaps most importantly, the House envisions that any assessment would generate $180 million instead of the $300 million initially projected by the administration. MassHealth is the commonwealth’s Medicaid health-insurance program for low-income people.

“The issues surrounding the MassHealth deficit and the proposed employer assessment are extraordinary complex. We believe the House proposal lays out a prudent process for reviewing the issue in a manner that will allow AIM to continue its ongoing discussions with lawmakers and the administration,” said Richard C. Lord, President and Chief Executive Officer of AIM.

The administration’s plan would impose a $2,000-per-employee assessment upon companies at which at least 80 percent of full-time worker equivalents do not take the company’s offer of health insurance, and that do not make a minimum contribution of $4,950 annual contribution for each full-time worker. If 70 percent of a company’s employees accept company health insurance, the company would be assessed $2,000 per employee for the number of employees represented by the 10 percent difference.

The employer assessment represents an expansion of the so-called fair share contribution plan that was a linchpin of the 2006 universal health care law in Massachusetts before it was repealed to make way for the federal Affordable Care Act (ACA). 

The House Ways and Means budget will require the administration to consider the following factors in developing any sort of health-care assessment on businesses in Massachusetts.

  • What a reasonable utilization (uptake) rate might be by reviewing other entities, such as the Group Insurance Commission;
  • Whether employees receive premium assistance through MassHealth;
  • Whether employees receive primary MassHealth benefits;
  • Whether employees receive insurance from other, non-MassHealth sources (spousal; parental; veterans);
  • Whether employees are residents of the commonwealth (and thus eligible for MassHealth);
  • What average Massachusetts employer contribution rates might be.

The review of the proposed assessment would involve multiple state agencies, including the Executive Office of Health and Human Services, the Department of Revenue (DOR), the Health Connector, the Division of Unemployment Assistance, the Center for Health Information and Analysis, and MassHealth.

A public hearing on proposed regulations must be held by the first week in October 2017.

The administration would be required to implement all regulations relative to an assessment by November 1. Full implementation of any resulting policy would occur on January 1, 2018. A small-business impact statement must be filed.

AIM has opposed the employer assessment because the growing shortfall at MassHealth, which provides health insurance to 1.9 million low-income Massachusetts residents, is attributable largely to problems arising from the ACA. Federal reform made access to health insurance an entitlement based on expanded income eligibility and significantly expanded the roles of people on Medicaid.

The House budget would require the administration to seek an ACA waiver that would allow the original prohibition to be reinstated.

Topics: Budget, Health Care Costs, Massachusetts House of Representatives

Survey: Employers Use Wages, Partnerships to Address Skills Crisis

Posted by Katie Holahan on Apr 5, 2017 1:30:00 PM

Massachusetts employers believe that the best way to address the shortage of skilled workers is to show those workers the money, according to a new AIM survey.

ManufacturingWorkerSmall.jpgAsked what strategies their companies have adopted to address the persistent skills gap that affects many industries, 47 percent of employers responded that they have increased wages and benefits. Forty percent say they use temporary-to-permanent employment agencies to find workers, and another 39 percent indicate that they have established a relationship with their local high school or vocational school.

The results were based on responses from 100 employers representing a cross-section of the state economy. Employers could check multiple answers.

Indeed, many employers seem to be using multiple strategies to find the employees they need. Approximately 25 percent of companies say they have established a relationship with a community college, recruited employees from outside the area, used state Workforce Training Fund Grants to improve the skills of existing workers, and established on-the job training.

“We do whatever works, but it is a growing, long-term problem,” said one employer who participated in the survey.

AIM’s Blueprint for the Next Century long-term economic plan for Massachusetts cites hiring and retaining skilled workers at the predominant challenge to the economic prosperity of Massachusetts. The Blueprint calls for Massachusetts to create a flexible and responsive statewide work-force development system that provides residents the opportunity to learn the skills that employers in each region demand.

Katie Holahan, Vice President of Government Affairs at AIM, finds it encouraging that a significant share of employers is forging ties with vocational schools, community colleges and other educational institutions.

“These collaborations allow employers to provide schools and colleges with a clear idea of the skills that are in demand and for the schools to teach those skills to students. It creates a talent pipeline that represents the only long-term solution to the shortage of skilled employees,” Holahan said.

AIM has also supported efforts by the Manufacturing Advancement Center Workforce Innovation Collaborative (MACWIC) to develop with vocational schools a competency-based curriculum for precision machining that allows students to meet prescribed industry standards.

The emphasis on raising wages and benefits appears at odds with other recent surveys showing that tight labor markets have yet to exert significant upward pressure on average wages.

Massachusetts employers responding to the 2017 AIM HR Practices Survey projected smaller average wage increases in 2017 than in 2016. Wage and salary increase budgets for this year were projected at 2.75 percent, down from 2.,9 percent in 2016 and lower than the predicted 3.0 percent budget increases predicted nationwide. 

If you are interested in keeping up with work force development area, please email Katie Holahan at

Topics: Education, Workforce Training

State Tightens Standard for Health Cost Growth

Posted by Katie Holahan on Mar 29, 2017 1:21:55 PM

The Massachusetts Health Policy Commission voted unanimously today to lower the state’s objective for the growth of health-care expenditures from 3.6 percent to 3.1 percent beginning in 2018.

HPC.jpgThe vote marks a significant milestone for employers and consumers struggling with the soaring cost of health insurance. AIM President and Chief Executive Officer Richard C. Lord, who represents employers on the Health Policy Commission, has been a vocal supporter of lowering the benchmark and voted in favor of the 3.1 percent level.

“Today’s vote represents a concrete, measurable step toward moderating the type of premium increases that give employers a knot in their stomachs when they look at their insurance renewals,” Lord said.

“The action will ultimately mean more than all the sound and fury over national health reform in Washington."

The spending growth benchmark, established as part of the health-cost control law of 2012, is a critical component for understanding year-over-year increases in health-care spending. AIM has always favored an aggressive goal – the organization joined with the Greater Boston Interfaith Organization in 2012 to support setting the health-care cost growth benchmark at two percentage points below the growth in the state’s economy.

The association ultimately supported the establishment of a 3.6 percent benchmark because it recognized the vital importance of creating a standard to measure cost-containment efforts.

But Massachusetts has not yet seen sufficient progress. The commonwealth has exceeded the 3.6 percent benchmark in two of the past three measurement periods. Total Health Care Expenditures (THCE) grew by 4.2 percent from 2013 to 2014, and by 4.1 percent from 2014 to 2015.

“These unsustainable cost increases are occurring in an industry where experts agree that at least a third of all care is unnecessary – delivered in the wrong setting; marked by a lack of coordination; provided with an inadequate emphasis on prevention; harmed by medical errors; burdened with rules and fraud; or just plain excessive,” Lord said.

AIM is also addressing the health cost issue by supporting new research conducted by the Health Policy Commission suggesting that Massachusetts could reduce total health-care expenditures anywhere from $279 million per year to $794 million per year, or 0.5 to 1.3 percent, by making seven improvements to the health-care system.

The improvements:

  • Shift community appropriate care to community hospitals – Reduce by 5-10 percent the number of cases treated at teaching hospitals that would be more appropriately treated at community hospitals. Savings: $43 million to $86 million.
  • Reduce hospital readmissions – Cut the 2015 hospital readmission rate from 15.8 percent (78,000 readmissions) to a range of 15 to 13 percent. Savings: $61 million to $245 million.
  • Reduce avoidable emergency room visits – More than 900,000 emergency room visits during 2015 were considered avoidable. Shift 5-10 percent of those avoidable visits to lower-cost settings. Savings: $12 million to $24 million.
  • Reduce use of institutional post-acute care – Redirect 5-21 percent of the patients who currently leave hospitals to go to institutional rehabilitation facilities into home care. Savings: $46.6 million to $186 million.
  • Provide incentives for consumers to choose high-value primary care providers.
  • Increase the use of alternative payment methods -The commonwealth wants to increase the percentage of HMO participants covered by alternative payment methods from 58.5 percent in 2015 to 80 percent this year. Savings: $23 million to $68 million.
  • Reduce the growth of prescription-drug spending – Cut the growth-rate of spending on prescriptions from 5.0 percent in 2016 to 3.6 percent to 4.3 percent. Savings: $57 million to $113 million.

Topics: Health Care Costs, Health Insurance, Health Care

Employers: Federal Health Reform Must Change

Posted by Katie Holahan on Feb 8, 2017 10:00:00 AM

Massachusetts employers believe overwhelmingly that federal health-care reform must change, but their opinions about how to do so vary widely.

Health_Care_Reform.jpgA new AIM survey finds that 43 percent of Bay State employers think that Congress and President Donald Trump should make changes to the existing Affordable Care Act, or Obamacare. Forty percent favor repealing the law and replacing it with an alternative program.

Eleven percent want to leave the current system in place while seven percent would repeal the reform law without an alternative.

The president and the Republican-controlled Congress have made “repeal and replace” a centerpiece of their governing priorities for the first 100 days. Republicans have yet to agree upon an alternative, but appear to favor eliminating the tax penalties imposed on people who go without insurance and on larger employers who do not offer coverage to employees.

The AIM survey was taken in January and is based upon responses from 162 employers from all sectors of the Massachusetts economy.

“The paperwork for Obamacare is ridiculous and terrifying for the regular person,” wrote one employer.

“We used to get one bill and now you get a bill from each doctor and have to wait for explanation of benefits and pre-register for everything. They have made health care so many layers it's no wonder the prices are through the roof.”

Another employer echoed that frustration.

“Trying to make changes to a 2,700-page bill with over 40,000 pages of accompanying regulations is bizarre. Start over,” the employer wrote.

Richard C. Lord, President and Chief Executive Officer of AIM, said employers supported the 2006 Massachusetts health-care reform as a first step to controlling the cost of providing health insurance to workers. Federal reform caused upheaval for many small employers in Massachusetts, but Lord also warns that an ill-considered repeal might put at risk billions of dollars in federal Medicaid funding that made the Bay State reform so successful.

“The expansion of Medicaid is exerting significant financial pressure on the state budget. Our hope is that policymakers in Washington can agree on some common-sense tweaks to Obamacare that would work to everyone’s benefit.”

Republican leaders formulating a replacement health reform have talked about eliminating tens of billions of dollars provided each year to states that have expanded eligibility for Medicaid. They have also discussed repealing subsidies for private health insurance coverage obtained through the public marketplaces known as exchanges.

The 2010 federal reform imposed taxes and fees on certain high-income people and on health insurers and manufacturers of brand-name prescription drugs and medical devices, among others. Republicans have not said for sure which taxes they will scrap and which they may keep.

The policy debate in playing out amid growing signs of accelerating health-insurance premium costs.

“My insurance premiums increased 24 percent this year. That is a little excessive,” one employer wrote.

Topics: Health Care Reform, Health Care Costs, Health Insurance

Infographic: The Governor's Proposed Health Assessment

Posted by Katie Holahan on Jan 25, 2017 4:21:34 PM

The Baker Administration filed a budget proposal today that, as expected, would impose a $2,000-per-employee tax on some employers to close a deficit in MassHealth. AIM opposes the assessment as unfairly burdening employers for a problem they did not create.

Which employers will be subject to the assessment? Here is an infographic that summarizes the administration proposal. AIM is developing a calculator that will allow employers to determine exactly what their costs will be under the new assessment.

If you have any feedback or questions about this proposal, please contact Katie Holahan at or 617.262.1180.

Fair Share 2017.jpg


Topics: Health Care Costs, Health Insurance, Charlie Baker

Proposal to Revive Fair-Share Assessment Raises Concerns

Posted by Katie Holahan on Jan 17, 2017 8:17:07 AM

The 4,000 member employers of Associated Industries of Massachusetts (AIM) believe that the Baker Administration’s proposal to impose a $2,000-per-employee tax on some employers is an unfair way to close a deficit in MassHealth.

health_care.jpgThe proposal would force employers to foot the bill for a problem they did not create. The $600 million shortfall at Masshealth, which provides health insurance to 1.9 million low-income Massachusetts residents, is attributable solely to problems arising from the federal Affordable Care Act, a law that may well be repealed by the time Massachusetts solves its Medicaid problems 

AIM acknowledges that the ACA-generated deficit at MassHealth is not the creation or responsibility of the Baker Administration.

The Affordable Care Act (ACA) made access to health insurance an entitlement based on expanded income eligibility.  Under the Massachusetts health care reform law of 2006, employees who were offered employer-sponsored health insurance were ineligible for MassHealth.  The ACA reversed that policy and allowed employees to decline employer coverage and still seek insurance through MassHealth.

The change created a migration of newly-eligible individuals from their employer-sponsored insurance to MassHealth, substantially increasing the commonwealth’s financial burden.  ACA made it an economically rational choice for eligible residents.

As MassHealth enrollment grows, the commonwealth experiences the reality that employers have faced for years - the high cost of health care coverage in this state threatens the underpinnings of the state economy.  This challenging moment underscores the fact that policymakers have concentrated too heavily on access issues instead of controlling the cost of health insurance, and now face a renewed imperative to lower costs for everyone in Massachusetts.

State House News Service reports that the administration plan would impose a $2,000 fee for all full-time workers - defined as someone who works 35 hours or more - upon businesses that don't cover at least 80 percent of their workers and share at least 60 percent of the premium cost with employees.

The employer assessment, which would bring an estimated $300 million into state coffers, represents a revival of the so-called fair share contribution plan that was a linchpin of the 2006 universal health care law in Massachusetts before it was repealed to make way for the federal Affordable Care Act. The state employer mandate was repealed in 2013 as lawmakers and former Gov. Deval Patrick worked to bring Massachusetts into compliance with the ACA.

There are positive elements to the administration’s proposal as well. AIM supports a freeze on new mandated health-insurance benefits and a cap on provider rates.

AIM recognizes that the administration’s proposal is the opening bid in what will be a protracted debate. We look forward to productive discussions with the administration and the Legislature to find a solution that does not wreak irreparable harm on the Massachusetts economy.

Topics: Health Care Reform, Health Care Costs, Health Insurance

Why Are Health-Care Costs Rising?

Posted by Katie Holahan on Feb 9, 2016 2:33:45 PM

A study released today by the Massachusetts Association of Health Plans, Associated Industries of Massachusetts (AIM), the National Federation of Independent Business (NFIB), and the Retailers Association of Massachusetts (RAM), identifies 14 key factors in the rising cost of health care.

HealthCost.jpgThe report is based on a review by Freedman HealthCare (FHC) of nine recent studies of the Massachusetts health-care marketplace.

"The rising cost of health care is a significant challenge for Massachusetts employers. These reports shed light on the factors driving health care costs and will inform the conversation on measures to contain the cost of health care," said Rick Lord, President and Chief Executive Officer of Associated Industries of Massachusetts.

Here are the 14 factors:

  1. Provider price, not utilization of health care services, is the biggest cost
    driver in the Massachusetts market. (Providers are doctors, hospitals and other entities that render medical care.)
  2. There is a significant gap between the highest and lowest paid providers.
  3. Health care is most often delivered in higher priced settings.
  4. High prices do not directly correlate with high quality of care – in other
    words, the highest paid providers do not necessarily provide the highest
    quality of care.
  5. Providers with the highest public payer case mix have the lowest
    commercial reimbursement.
  6. Academic medical centers are associated with higher health care costs.
  7. In response to increasing provider prices, the commercial market is seeing
    increased consumer cost sharing.
  8. Market share impacts health care costs by influencing price, utilization,
    and available resources.
  9. There is growing policy concern that provider consolidation may lead to
    higher prices, rather than savings from integration of care or improved
  10. Despite its increasing promotion, the widespread adoption of global
    payments faces significant challenges, and there is limited evidence to
    suggest that global payments produce cost savings.
  11. Performance against the cost growth benchmark is mixed.
  12. Pharmaceutical costs have been increasing and are expected to increase
    in the future.
  13. The state is increasingly focused on behavioral health – specifically, the
    high cost associated with behavioral health conditions, the challenges of
    clinical and administrative integration of care, and the need for better data.
  14. Due to persistent and increasing disparities in provider prices over the
    past several years, the state is recommending policy action be taken to
    reduce excessive price variation.

Topics: Health Care Reform, Health Care Costs, Health Insurance

Infographic: The Rising Cost of Health Care

Posted by Katie Holahan on Dec 17, 2015 1:27:03 PM

The Massachusetts Health Policy Commission this week released its 2015 Cost Trends Report examining the cost of health care and health insurance in the commonwealth. Per-person spending on health care grew at less than the 3.6 percent overall economic growth rate, though overall spending grew at 4.8 percent. The bottom line is that health care spending continues to divert precious resources from employers, families and state government.

Graphics are courtesy of the Health Policy Commission.





Topics: Health Care Costs, Health Care, Benefits

Lord Re-Appointed to Health Cost Control Commission

Posted by Katie Holahan on Dec 10, 2015 12:01:59 PM

Associated Industries of Massachusetts President Richard C. Lord has been re-appointed to a five-year term on the board of a commission charged with moderating health insurance costs in Massachusetts.

aim_centennial_fm-1942-2.jpgLord was re-appointed to the 11-member Massachusetts Health Policy Commission board by State Auditor Suzanne Bump. Also re-appointed for five years was Harvard University Economics Professor David Cutler. Former gubernatorial candidate and former Medicare and Medicaid Director Donald Berwick will also join the group under an appointment by Attorney General Maura Healey.

The Health Policy Commission is an independent state agency that develops policy to reduce health-care cost growth and improve the quality of patient care. Created under the state health-cost control law of 2012, the HPC is responsible for monitoring the performance of the health care system, analyzing the impact of health care market transactions and ensuring that health-care costs rise no faster than the overall rate of state economic growth.

“The Health Policy Commission works on the front lines of the battle to make health-insurance costs affordable for employers and their workers,” Lord said.

“It’s a privilege to represent hard-working employers in this important work.”

The commission has recently been reviewing a 4.8 percent surge in total health-care expenditures during 2014, an increase that exceeds both the 2.4 percent increase for 2013 and the 3.6 percent cost benchmark. Massachusetts patients spent $54 billion - that's $8,010 per person – on medical care last year while employers continued to pay some of the highest health-insurance premiums in the country.

The commission heard from health-care experts, elected officials and employers during three days of hearings in October focused on identifying strategies to limit cost increases and improve quality.

AIM-member employers often cite the cost of providing health insurance to workers as one of their primary concerns about doing business in the commonwealth. The issue is among four major iniatives included in AIM's Blueprint for the Next Century long-term economic plan for Massachusetts.

Stuart Altman, Professor of National Health Policy at The Heller School for Social Policy and Management at Brandeis University, chairs the Health Policy Commission board. Other members in addition to Lord, Cutler and Berwick include Wendy Everett, President of NEHI, a national health policy research institute; Carole Allen, a retired pediatrician from Arlington; Martin D. Cohen, president/CEO of the MetroWest Health Foundation; Secretary of Administration and Finance Kristen Lepore; Ron Mastrogiovanni, President and Chief Executive Officer of HealthView Services; Secretary of Health and Human Services Marylou Sudders; Veronica Turner is the Executive Vice President of 1199SEIU.

Lord is widely acknowledged as an expert on the impact of health-insurance costs on employers. He serves on the boards of the Massachusetts Health Quality Partners and the Massachusetts Health Council and is a former board member of the Commonwealth Health Insurance Connector Authority.



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Topics: Health Care Costs, Richard Lord, Business Costs

Health Reform Change will Help Massachusetts Employers

Posted by Katie Holahan on Oct 2, 2015 1:21:00 PM

A rare show of bipartisanship in Congress appears likely to give Massachusetts the ability to sidestep a provision of federal health reform that threatened to boost premiums for companies with 51-100 employees.

USCapitol1The House of Representatives and Senate this week passed by voice votes a bill that would amend a provision of Obamacare forcing those employers into the merged health-insurance market for small companies and individuals. The shift would have raised rates for many employers with payrolls of 51 to 100 because they would subject to more stringent actuarial value, cost sharing and essential health benefit requirements, as well as state rating rules that have not applied to them.

Instead, the Protecting Affordable Coverage for Employees (PACE) Act will continue to classify 51-100 employee companies as large employers unless states decide to treat them differently.

The White House indicates that President Barack Obama plans to sign the bill.

“The opportunity for Massachusetts to maintain the current health-insurance rating system for employers with 51 to 100 workers is great news for the state economy at a time when health costs appear to be accelerating,” said Richard C. Lord, President and Chief Executive Office of Associated Industries of Massachusetts.

“The PACE Act promises to provide predictability and benefit-plan flexibility for employers moving forward.”

AIM has been pressing for more than a year for regulatory or legislative relief from the expansion of the small-group market. The federal government in August approved a transition period allowing the 51-100 companies to buy insurance under current rating system until October 1, 2016, instead of the January 1, 2016 date established by the Affordable Care Act.

The cost of health insurance is already showing signs of accelerating for small employers after several years of moderate increases. The Massachusetts Division of Insurance has approved premium increases averaging 6.3 percent for the first quarter of 2016 for companies with 1 to 50 employees. That’s more than double the 3.1 percent average increase that small business saw in the first quarter of this year.

PACE "is a smart health care bill aimed at protecting workers’ benefits, lowering premiums and reducing costs to taxpayers,” Senate Majority Leader Mitch McConnell, R-Ky., said after clearing the bill.

Jeanne Shaheen of New Hampshire, the Senate bill’s lead Democratic sponsor, also applauded the move in a statement. “While the Affordable Care Act continues to divide Congress, today we’ve made real progress towards improving this law,” she said.

AIM continues to lobby for the same sort of state flexibility on a separate provision of federal health reform affecting rates for smaller employers. Massachusetts has for many years used 11 rating factors in its merged individual and small-business health insurance market, but federal health reform is phasing that number down to four, a change that is adding significant turbulence to the small-group health market.

Topics: Health Care Reform, Health Care Costs, U.S. Congress

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