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AIM Urges Secretary Sebelius to Approve Health-Reform Waiver

Posted by Rick Lord on Jul 22, 2013 9:00:00 AM

Associated Industries of Massachusetts has formally asked U.S. Secretary of Health and Human Services Kathleen Sebelius to approve Governor Deval Patrick’s anticipated request for a waiver from several provisions of the Affordable Care Act (ACA) that could raise premiums for some small Bay State employers by more than 50 percent.

SebeliusIn a letter delivered to Sebelius on July 10, AIM urges approval of a limited waiver that would allow Massachusetts to maintain the current nine rating factors in its merged individual and small-business health insurance markets, and to maintain its practice of filing rates quarterly, rather than annually. Allowing Massachusetts to retain these two elements of its 2006 health reform, the letter says, will preserve hard-won expansions of coverage to individuals without causing rate shocks that could increase health insurance costs for thousands of employers.

AIM also maintains in the letter that the Department of Health and Human Services has the authority to grant the waiver sought by Governor Patrick. The Treasury Department’s decision two weeks ago to postpone until 2015 the requirement that larger employers provide health insurance to workers or pay penalties suggests that the administration enjoys broad administrative authority to take actions that advance the overall goal of expanding coverage.

AIM delivered copies of the letter to members of the Massachusetts Congressional delegation after meeting with them last month to seek their support of the waiver request. 

Read the full AIM Letter

Governor Patrick will request regulatory relief under terms of a bill passed by the Legislature last month requiring the governor to seek a waiver from the rating changes and annual rate filing. The ACA will limit to four the rating factors used to calculate small group health insurance premiums – age, family size, geographic area and tobacco use. Massachusetts law allows for additional consideration of industry, participation rate, group size, intermediary discount and group purchasing cooperatives.

A study released last week by Massachusetts health insurance companies predicts that changes brought about by federal health care reform, independent of other rating factor changes, will raise premiums for Bay State employers by an average of 3.7 percent on top of typical base-rate increases. The study found that the rating changes from which Governor Patrick will seek a waiver could raise or lower rates for companies by up to 57 percent.

“The question remains, why would you introduce a considerable amount of unpredictability and variability into a stable market that has already achieved the objectives of federal health care reform?” said John Regan, Executive Vice President of Government Affairs at AIM.

AIM in its letter tells Secretary Sebelius that the association and its 5,000 members have been consistent champions of both federal and state health reform. The organizations believes, however,  that Massachusetts deserves the opportunity to retain important elements of a groundbreaking seven-year state reform initiative that has extended health insurance coverage to 98 percent of its people.

Topics: Associated Industries of Massachusetts, Health Care Reform, Health Care Costs, Issues

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