Massachusetts employers are living through a twisted version of Cinderella in which the federal fairy Godmother helps everybody but the one who needs to get to the Ball.
The Obama Administration waved its magic wand not once, but twice last week with administrative rulings postponing two key elements of federal health care reform. The government delayed by a year the requirement that medium-to-larger firms cover their workers or face fines and approved the Massachusetts Health Connector’s request to extend existing coverage plans for 124,000 subscribers beyond March 31 for another three months until June 30.
But employers seeking a little bibbidy-bobbidi-boo to avert catastrophic changes in health insurance rating requirements that threaten to raise rates for some by more than 50 percent were once again left with nothing but a pumpkin. It seems the only issue the government refuses to resolve with its magic dust is the one that has caused unnecessary rate shock for small businesses in a commonwealth that already had health reform down pat before the feds butted in.
The ACA limits to four the rating factors used to calculate small group health insurance premiums, while current Massachusetts law allows for additional consideration of factors such as industry, participation rate, group size, intermediary discount and group purchasing cooperatives.
Governor Deval Patrick requested a rating-factor waiver on September 3, noting that “a waiver of rating factor requirements will avoid increases in health insurance premiums for a large segment of our small-employer population and their employees.” Secretary of Health and Human Services Kathleen Sebelius denied the request on September 26.
A study by health insurance companies indicates that the rating changes have raised or lowered rates for small companies by up to 57 percent, on top of average increases of 3.7 percent in their base insurance premiums.
A separate survey by AIM found that 60 percent of small employers who renewed their health insurance policies on January 1 saw increased premiums. Among the employers who said they would consider making changes to their health plans as a result of the increases, 20 percent told AIM they plan to drop coverage all together because the price hikes are unaffordable. As one member said, “We have not had a pay increase in 12 years and an 18 percent increase in our insurance is deplorable.”
The federal government has already granted more than 1,200 ACA waivers and made numerous administrative modifications to the law. Except on the rating factor issue.
The first waiver last week postponed enforcement of a federal requirement for employers with 50-99 full-time employees to provide health insurance and allow larger employers more flexibility in how they provide coverage. The second waiver came when the Centers for Medicare and Medicaid Services granted the Commonwealth Connector a three-month enrollment deadline extension as the state struggles to fix its troubled health care insurance website.
All of these machinations come in a state where the health care system was working smoothly before being co-opted by the Affordable Care Act.
Anyone seen our glass slipper?