Associated Industries of Massachusetts and its thousands of member employers are today calling upon Governor Deval Patrick to seek a waiver or regulatory flexibility from certain provisions of federal health-care reform to allow Massachusetts to maintain its current insurance rules. Otherwise, the federal reform law threatens to shatter the groundbreaking progress the Bay State has made to control the cost of health care.
Massachusetts has led the United States in creating a world-class health care system– first with the landmark 2006 Health Reform Law and again last year with a first-in-the-nation health cost-control measure. But the federal Affordable Care Act (ACA) that was supposed to dovetail with the Massachusetts reform law now threatens to accelerate the already burdensome cost of health insurance for employers, citizens and a commonwealth that spends half its budget on providing health coverage to workers.
It may be called the Affordable Care Act, but affordable for whom?
The issue reflects no lack of effort on the part of the Patrick administration, which has pursued low-key negotiations with the Department of Health and Human Services in Washington to secure the latitude Massachusetts needs to integrate federal reform with one of the only state-level health laws in the nation. But the storm clouds gathering as the ACA barrels toward full implementation next year now make it necessary for the governor to take a more direct approach in preserving the Massachusetts reform.
As state insurance commissioner Joseph Murphy recently told The Boston Globe: “Obviously the latest rules from the federal government have a significant impact on Massachusetts. We will work with our colleagues at the federal level to try to mitigate the adverse impact these changes may have on Massachusetts businesses.”
A review prepared for the AIM Health Care Cost and Policy Committee last month indicates that three elements of federal health care reform - a tax increase on health insurance, a shift in the size of small-group markets, and a series of rating changes – could leave many Massachusetts employers and consumers paying increased health-care bills.
The tax increase on health insurance premiums will cost employers and consumers in Massachusetts $213 million in 2014 and $3 billion during the next decade. Average monthly premium costs will rise anywhere from $24.06 to $65.79 per policy, depending upon employer size and individual or family coverage.
The impact of changes to rating factors and the size of the small-group market could reduce premiums by an average of 2.5 percent for companies with 1-50 employees, with smaller companies faring better than those with 25-50 workers. The changes would increase costs 7.5-10.5 percent for companies with 51-100 workers and as much as 3 percent for companies that employ more than 100 people.
But the collateral damage does not stop there. ACA rules require states like Massachusetts that merged their individual and small-group health insurance markets to set rates only once a year instead of the current quarterly time frame. Massachusetts employers and consumers have recently benefitted from rate filings that actually declined from one quarter to the next.
Last year at this time we believed that implementing the Affordable Care Act in Massachusetts would be a smooth transition because we had more than six years of Massachusetts health care reform behind us. But, as we learn more about the details of the federal law, as regulations and guidance are released, the less we believe this to be true. Massachusetts employers must undo many of the procedures they put into place to comply with the state law in order to comply with the federal law.
AIM remains proud of the leadership role played by the business community in Massachusetts’ unprecedented efforts to create an affordable, accountable world-class health care system. A strong coalition of business leaders, advocates, medical professionals, insurers and policy leaders all had a seat at the table to negotiate and develop the rules that led to this success. That critical step is missing from the current Federal process and as a result, the approach is threatening to disrupt the state’s accomplishments over the past seven years.
It is time for Governor Patrick to prevent that from happening.