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Katie Holahan

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AIM to Senate - Control Health Costs, Reform MassHealth

Posted by Katie Holahan on Nov 8, 2017 11:50:22 AM

Editor's note - The following are excerpts of a letter that AIM sent to Senate President Stan Rosenberg and members of the Senate as they began debate on a health-care reform measure. The Senate passed its health reform bill last week.

Dear Mr. President and Members of the Senate:

After eleven years of universal health insurance, Massachusetts has made great strides to ensure our residents have access to some of the best health care in the nation and the world. Thus far, we have failed to make comparable progress in containing the cost of both health-care services and insurance for employers and their work forces.

MedicalRecordSmall.jpgMassachusetts residents are assured of access to high quality health care, without the assurance that they can afford it. Our complex, confusing health-care system leaves both consumers and employers at a disadvantage when it should empower them to advocate for their long-term health and productivity.

According to the most recent data available from the Centers for Medicare and Medicaid Services (CMMS), Massachusetts was the second highest-spending state for health care in 2014 shelling out 30 percent more than the national average. Personal health-care spending in Massachusetts, per capita, has increased more than 12 percent in five years – from $9,417 in 2009 to $10,559 in 2014.

Cost growth like this is unsustainable and has increased unabated in the face of attempts by both employers and the commonwealth to contain it.

Employers, especially smaller employers, have almost nothing to show in the way of cost savings and efficiencies five years after Massachusetts’ major push toward health-care cost containment. These cost increases are occurring in an industry in which experts agree that at least one-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.

We are pleased by the Senate’s focus on difficult and expensive issues like Massachusetts’ high re-admission rates, to encourage more efficient care focus on keeping consumers healthy and out of care settings. We also support the Senate’s efforts to include provider costs in the commonwealth’s efforts to track and contain year-over-year spending increases.

We would like to express our support for Amendment #38, filed by Senator Donaghue, and Amendment #67, filed by Senator deMacedo, both of which return assessments on carriers and providers to rate payers in the form of premium reductions. The most meaningful immediate health-care reform for employers and workers is a reduction in their monthly premiums.

With that in mind, we would urge careful consideration of any new policies, with particular focus on potential financial implications. A number of amendments have been filed that expand the mandated benefits required for coverage in Massachusetts. Although many health-care services are worthy, before acting to expand benefits we must understand the complete financial effects of any such changes, particularly since the Affordable Care Act requires that states pay for any mandated benefits enacted after December 31, 2011 in excess of the federally required essential health benefits.1

AIM would oppose the implementation of any new mandated benefits, without the completion of a fiscal analysis by the Center for Health Information and Analysis. The following amendments contain some form of expanded mandated benefit:

LettertoSenate.jpg

We should, instead be further supporting innovative products and practices that lower costs and encourage healthy habits and practices. We would like to express our support for Amendments #51 and 101, filed by Senators Moore and Timilty, respectively, to reinstate the Wellness Tax Credit for small employers.

AIM also supports Senator Moore’s Amendment #45, which would remove confusion about the definition of telemedicine and would allow licensed providers to prescribe certain medicines. We are supportive of facilitating market-based solutions that could help employers innovate and bring down costs.

However, in a state facing an alarming deficit in its Medicaid program, employers are now shouldering the escalating costs of the public healthcare system. For the next two years, employers statewide will provide at least $200M annually in funding for MassHealth. This is in addition to the cost and administrative burden of providing commercial health insurance to their workers.

Most importantly, employers are tasked with closing a funding deficit absent any of the long-term structural reforms needed to solve the underlying financial problems with the program. Over the past eleven years, employers have implemented wellness programs, purchased innovative insurance products, embarked on employee educational programs – all with the goal of providing higher quality insurance that keeps their employees healthier and costs lower.

The same cannot be said of the public health insurance program. We oppose any amendments that expand the current MassHealth program, including Amendments #2, 93, and 153. Regardless of enrollment rates, action must be taken to improve the efficiency and cost-effectiveness of this currently unsustainable program. The result will not be simply cost reductions, but higher quality of care for enrollees in the long term.

Thus, we express our support for Amendments #74 and #122, filed by Senator Tarr, which not only eliminate the buy-in option for MassHealth, but also provide a framework for efficiently determining eligibility so those who truly need it can access much-needed health-care services.

We would like to voice our strong support of Amendment #57, filed by Senator deMacedo, which would eliminate the so-called Name and Shame list.

The Affordable Care Act (ACA) reversed existing Massachusetts law and now allows income-eligible employees to decline employer coverage and seek insurance through MassHealth. That change created a migration of newly eligible individuals to MassHealth, substantially increasing the Commonwealth’s financial burden. The ACA made public health insurance an economically rational choice for eligible residents in a state known for its expensive health-care system, and employers should not be publicly shamed for a choice they cannot control.

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 our economy. Policymakers who have concentrated almost exclusively on access and coverage now face a renewed imperative to lower the cost of health insurance for everyone in Massachusetts.

We are active participants in providing health insurance to the majority of residents in the commonwealth, a role that we have played for the past 10 years and more. It is an integral part of the Massachusetts economy and we look forward to working with you to bring the same level of innovation and sustainability to health care coverage, traits which Massachusetts is known for worldwide.

Topics: Health Care Costs, Health Insurance, Employer Health Assessment

State Issues Regulations on Employer Health Assessment

Posted by Katie Holahan on Nov 6, 2017 4:08:53 PM

The Baker Administration today released draft regulations for the new employer health assessment designed to close a budget shortfall in the state's MassHealth program.

Read the Draft Regulations

The regulations, published by the Massachusetts Department of Unemployment Assistance (DUA), explain details of how the new Employer Medical Assistance Contribution (EMAC) supplement will be administered. The EMAC supplement is a new wage tax, levied on employers who have certain workers enrolled in either the MassHealth program or subsidized Health Connector coverage. 

  1. Employers with six or more employees will access their estimated liability for the EMAC supplement quarterly, via their DUA online account when they provide their quarterly wage filing;
  2. Detailed information will be provided as to the number of their employees on MassHealth or subsidized Connector coverage;
  3. Employers have 10 days from receipt of this information to appeal their determination of liability to the DUA.

The draft regulationsare available for public review and response. The Department will hold five listening sessions, across the state, to allow employers and interested parties to provide in-person feedback:

  • Boston | November 13 | 1-3 pm | Hurley Building
  • Springfield | November 14 | 10 am - nooon | Department of Industrial Accidents office
  • Worcester | November 15 | 2-4 pm | Department of Industrial Accidents office
  • Lawrence | November 16 | 10 am - noon | Department of Transitional Assistance.

A fifth session will be scheduled on Cape Cod.

Questions and suggestions may also be shared with the Department electronically.

 

Topics: Controlling Health Care Costs, Employer Health Assessment

Health Reform Must Address Employer Costs

Posted by Katie Holahan on Oct 24, 2017 11:33:45 AM

Associated Industries of Massachusetts (AIM) is pleased that the state Senate on Monday conducted a hearing on a proposal to address the challenging issue of healthcare affordability. The primary question for AIM in evaluating any such proposed legislation is whether it eases the burden of employers struggling to provide good health insurance to workers.

health_care.jpgIn 2006, employers joined with doctors, hospitals, patient advocates, and lawmakers to forge a health-reform law that required everyone to share the responsibility for improving access to health care. Eleven years later, Massachusetts residents enjoy the highest levels of health-insurance coverage in the nation.

Yet we have failed to make progress to contain the unsustainable increases in health-care costs.

According to the most recent data available from the Centers for Medicare and Medicaid Services (CMMS), Massachusetts was the second highest-spending state for health care in 2014, shelling out 30 percent more than the national average.

Personal health-care spending in Massachusetts, per capita, has increased more than 12 percent in five years – from $9,417 in 2009 to $10,559 in 2014. Cost growth like this is unsustainable and has increased unabated in the face of attempts by both employers and the commonwealth to contain it.

Businesses, in fact, have almost nothing to show in the way of cost savings and efficiencies five years after Massachusetts made a major push toward health-care cost containment in 2012. The commonwealth has exceeded the 3.6 percent spending growth benchmark established as part of the health-cost control law of 2012 in two of the past four 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 cost increases are occurring in an industry in which experts agree that at least one-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.

Massachusetts employers have strong ideas about some of the policies included in the draft Senate health-reform legislation:

MassHealth Reforms

In a state facing an alarming deficit in its Medicaid program, employers are currently shouldering the escalating costs of the public health-care system. For the next two years, employers statewide will provide at least $200 million annually in funding for MassHealth in addition to the cost of providing commercial health insurance to their workers.

More importantly, employers are being asked to close a funding deficit absent any of the long-term structural reforms needed to solve the underlying financial problems with the program. Action must be taken to improve the efficiency and cost-effectiveness of this currently unsustainable program.

Optional expanded Medicaid plan

AIM must raise grave concerns with the notion of expanding the MassHealth program through an optional Medicaid plan (SECTION 123) without first addressing existing policies that encourage and sustain needlessly expensive health-care habits.

Employers have long sought to contain costs in commercial health insurance by encouraging cost-effective habits like relying on primary care physicians for non-emergency care. The same cannot be said for the MassHealth program. The inappropriate use of emergency rooms is an example of one major cost driver identified by the Health Policy Commission. To contain costs and facilitate coverage, we must address our greatest cost-drivers in health-care utilization across the entire spectrum of both commercial and public health insurance before we implement any sort of further programmatic expansion.

“Name and Shame” List

AIM also opposes the so-called “Name and Shame” list (SECTION 38), highlighting employers with workers in the MassHealth program. The 2006 health-reform law made employees who were offered employer-sponsored health insurance ineligible for MassHealth. The intent was to balance the requirement that employers do their “fair share” with concerns about the financial burden on the MassHealth system.

The Affordable Care Act (ACA) reversed that policy and allowed income-eligible employees to decline employer coverage and 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. The ACA made public health insurance an economically rational choice for eligible residents in a state known for its expensive health-care system.

Provider Price Variation

Provider price variation includes both reasonable and unreasonable variation in the pricing of health care services. Reasonable variation in pricing should be supported and limited by a transparent marketplace in which consumers have access to clear cost and quality metrics. By mandating a minimum increase in provider prices (SECTION 111) without alleviating existing high-cost drivers, we facilitate the continued increase in price variation without seeking to understand and differentiate among the cost-drivers that result in both reasonable and unreasonable price variation.

Innovative Insurance Products

While we support market-based solutions through innovative insurance products like limited and tiered-network products, we are concerned that the differential limitations alone will be insufficient to leverage this new approach. Without a requirement that all providers participate in the contracting for such products, insurers will not always have the negotiating power to construct products in all regions of the commonwealth.

Scope-of-Practice Expansions

AIM supports the various scope-of-practice expansions included in the draft legislation. Expanding access to vital care from qualified providers for all residents of the commonwealth is a common-sense reform that helps to move us closer to a healthcare system that is efficient and effective.

Telemedicine

AIM supports the inclusion of telemedicine services (SECTION 94) to facilitate innovative, cost-effective health-care services for consumers across the commonwealth. Telemedicine services could provide additional care options for consumers with limited access, preserve productivity, and reduce time lost traveling great distances to providers. A vital component of this policy is requirement that payment for telemedicine services cannot exceed the costs related to an in-person visit. We must prioritize innovative policies that both increase access and decrease costs for residents statewide. Telemedicine should and could do exactly that.

AIM-member employers are active participants in providing health insurance to the majority of residents in the commonwealth. Moderating the cost of that insurance and putting health care on a financially sustainable business is critical to the future of the Massachusetts economy.

Please contact me at kholahan@aimnet.org if you would like to be updated on the progress of health reform in Massachusetts.

Topics: Massachusetts senate, Controlling Health Care Costs, Health Insurance

Two Bills Advance Efforts to Address Skills Shortage

Posted by Katie Holahan on Aug 14, 2017 7:30:00 AM

AIM’s Blueprint for the Next Century long-term economic plan for Massachusetts identifies the shortage of qualified workers as the central impediment to the future of the Bay State economy. Worker shortage cross almost every industry, from manufacturers in the Pioneer Valley to software companies in Boston’s Innovation District to research and engineering firms on the North Shore.

ManufacturingWorkerSmall.jpgThe 4,000 member employers of AIM believe there are three key steps to addressing the problem:

  1. Identify opportunities to restructure state work-force training programs to anticipate both near and long-term work-force growth;
  2. Diversify the types of relevant training and education available to students statewide; and,
  3. Allow the public education system the flexibility and adaptability to respond to the needs of the local and regional work force, so graduates enjoy greater economic opportunity.

Two bills recently released from the Legislature’s Joint Committee on Labor and Workforce Development will help Massachusetts achieve the first goal.

The bills, Senate 2109 and House 3804, filed by the late Senator Ken Donnelly and Representative Kenneth Gordon, respectively, would allow a transfer of up to $1.1 million, or 5 percent, of funds from the Workforce Training Fund to the Workforce Competitiveness Trust Fund (WCTF) to be used for sector-based job training for non-incumbent workers. The Workforce Training Fund generates revenues via employer assessments, and is normally used to improve the skills of workers who are already on the job.

AIM advocated successfully for a pay-for-performance funding structure in the proposed grant program. Half of the grant funds in the program will be tied to job placement and retention outcomes. The money won’t be released until workers are trained and in their new, full-time jobs for two months. Such discipline and measurement will allow the state to connect the available workforce with employers so that all regions and industries have similar opportunities for success.

Training both incumbent workers and new workers will create the type of flexibility needed to respond to a changing economy while meeting clear job growth objectives.  As the commonwealth works to modernize and streamline its work-force development system, AIM will continue to advocate for such requirements in any similar pieces of workforce legislation.

The creation of a job and a person’s ability to do that job weave together every important aspect of social and economic stability: the desire for a better life; the ability to support a family; the confidence to start a business; and the need to support efficient government management of services like education, health care, and public safety.

Governor to Sign Employer Assessment

Posted by Katie Holahan on Aug 2, 2017 7:43:35 AM

Governor Charlie Baker said last night that he intends to sign legislation imposing a $200 million MassHealth assessment on employers. The governor also reaffirmed his commiment to work with lawmakers to make long-term structural reforms to the state’s health-insurance program for low-income people.

“While this is certainly not the outcome we hoped for, we recognize that the governor’s decision is carefully considered and designed to achieve the ultimate, long-term goal of substantive MassHealth reform,” said Rick Lord, President and Chief Executive Officer of Associated Industries of Massachusetts.

“We are encouraged by the repeated statements of commitment by both Senate and House leadership that reform of the MassHealth system is as high a priority for them as it is for the employer community.

“In 2006, employers joined with doctors, hospitals, patient advocates, and lawmakers to forge a health-reform law that required everyone to share the responsibility for improving access to health care. Right now, employers are faced with a policy levying a new tax on businesses without any corresponding cost-efficiencies implemented in the public health-care system. We anticipate a continued dialogue as we work to affect meaningful, sustainable, long-term MassHealth reform.

“We are willing – in fact, we must – join together once again with a renewed focus to ensure the commitments of the employer community are not made in vain,” Lord said.

Topics: Massachusetts state budget, Health Care Costs, Employer Health Assessment

Legislature Levies Medicaid Assessment Minus Reforms

Posted by Katie Holahan on Jul 26, 2017 4:53:35 PM

The Massachusetts Legislature today levied a $200 million tax on employers to cover a shortfall in the MassHealth program without making long-term structural changes needed to solve the problem.

StateHouse-resized-600.pngThe House of Representatives and Senate took the action despite pleas yesterday from the Baker Administration and the business community to consider the assessment and the long-term reforms as a package. AIM believes the financial problems at MassHealth, which provides health insurance to 1.9 million residents, will become more severe without significant reforms.

The assessment would increase the Employer Medical Assistance Contribution (EMAC) and fall most heavily on companies where employees use MassHealth instead of an employer health plan. The assessment would be partially offset by a two-year Unemployment Insurance rate adjustment that would save employers $335 million over two years versus current rates.

“The 4,000 employer members of Associated Industries of Massachusetts (AIM) are deeply disappointed that the Legislature has again decided to impose an assessment on employers without reforming the MassHealth program and reining in the crippling cost of health insurance,” said John Regan, Executive Vice President of Government Affairs at AIM.

“We note that the Legislature has pledged to pursue MassHealth reforms at a later date. We look forward to working with them on those reforms.”

The Legislature initially passed the reform-free assessment on July 7 as part of the budget for Fiscal Year 2018. Governor Charlie Baker returned that section of the budget to the Legislature 10 days later and asked lawmakers to pass the full package of reforms designed to place MassHealth on a firm financial footing.

The proposed reforms include:

  • Restructuring MassHealth coverage for non-disabled adults to look like commercial insurance coverage;
  • Moving 140,000 people with incomes more than the federal poverty level out of MassHealth and into ConnectorCare;
  • Shifting 230,000 MassHealth members from standard MassHealth coverage, which includes coverage for long-term care, into CarePlus, which does not;
  • Requiring the commonwealth to petition the federal government to re-establish the prohibition against employees who are offered employer-sponsored insurance from seeking coverage through MassHealth.

It is uncertain whether the governor will sign the newest version of the assessment.

“Employers are thus left not only to struggle with the rising cost of providing health insurance to their own employees, but to bail out an unsustainable public insurance program as well,” Regan said.

Topics: Massachusetts Legislature, Health Insurance, Employer Health Assessment

Governor Sends Back Employer Assessment; Seeks MassHealth Reforms

Posted by Katie Holahan on Jul 17, 2017 3:38:18 PM

Governor Charles D. Baker returned to the Legislature today the employer health-care assessment portion of the Fiscal Year 2018 budget, along with provisions changing Unemployment Insurance rates for 2018 and 2019, and urged legislators to include long-term reforms that will put the MassHealth program on a firm financial footing.

Health.Energy.jpgThe governor is also filing separate legislation making reforms to the commercial health-insurance market.

“The governor’s actions provide the Legislature with the opportunity to review and vet the reforms, and to pass a thoughtful, comprehensive package that balances investments made by all stakeholders in the Massachusetts healthcare system,” said Richard C. Lord, President and Chief Executive Officer of Associated Industries of Massachusetts.

The employer assessment would raise $200 million annually through the Employer Medical Assistance Contribution (EMAC) and fall most heavily on companies where employees use MassHealth instead of an employer health plan. The assessment would be offset by a two-year Unemployment Insurance rate adjustment that would save employers $335 million over two years versus current rates.

The administration hammered out the MassHealth reforms during months of negotiations with AIM and other members of the business community. The proposed reforms include:

  • Restructuring MassHealth coverage for non-disabled adults to look like commercial insurance coverage;
  • Moving 140,000 people with income above 100% of the federal poverty level out of MassHealth and into ConnectorCare;
  • Shifting 230,000 MassHealth members from standard MassHealth coverage, which includes coverage for long-term care, into CarePlus, which does not;
  • Requiring the commonwealth to petition the federal government to re-establish the prohibition against employees who are offered employer-sponsored insurance from seeking coverage through MassHealth.

The Baker Administration’s decision to file stand-alone legislation addressing commercial health insurance reforms acknowledges the need for comprehensive reform of our private healthcare systems. As employers are faced with the second most expensive health-care costs in the nation, the need for reform and cost containment is vital to maintain both the quality of care and the level of coverage across our commonwealth.

AIM looks forward to the Legislature’s consideration of these challenging topics and their willingness to engage with a broad coalition of partners across our health-care system to attain an equitable resolution.

Topics: Massachusetts state budget, Controlling Health Care Costs, Employer Health Assessment

Beacon Hill Passes Health Assessment Without Reforms

Posted by Katie Holahan on Jul 7, 2017 12:10:00 PM

The Massachusetts Legislature today passed a Fiscal Year 2018 budget that requires employers to cover a financial shortfall in the MassHealth program, but does not make the long-term structural changes needed to solve the problem.

statehousedome1.jpg“The 4,000 employer members of Associated Industries of Massachusetts (AIM) are deeply disappointed that Massachusetts has refused to take the courageous steps necessary to reform the MassHealth program and to rein in the crippling cost of health insurance,” said Richard C. Lord, President and Chief Executive Officer of Associated Industries of Massachusetts.

“The proposed state budget would force employers already struggling with the rising cost of providing health insurance to their employees to also pick up the tab for bailing out the unsustainable MassHealth program.”

The budget turns away from key elements of a compromise forged by the business community and the Baker Administration that balanced restructuring of MassHealth and the private insurance market with a temporary, $200 million assessment on employers. The compromise was designed to address the structural cost imbalances in MassHealth and place the program on a sound financial footing.

The business community has instead been left with a reform-free plan that will create a new tax on employers without making any hard decisions on containing costs.

The assessment would increase the Employer Medical Assistance Contribution (EMAC) and fall most heavily on companies where employees use MassHealth instead of an employer health plan. The assessment would be partially offset by a two-year Unemployment Insurance rate adjustment that would save employers $335 million over two years versus current rates.

“On its own, the employer assessment negatively impacts thousands of businesses around the state.  That impact is only acceptable as one part of a broader package that begins to address underlying health care costs,” AIM and a coalition of employer groups said in a statement.

“Eleven years ago, employers joined with doctors, hospitals, patient advocates and lawmakers to forge a health-reform law that required all parties to share the responsibility for improving access to health care. The employer community calls for that same sense of shared responsibility now to solve the MassHealth shortfall,” Lord said.

Business Groups | Lack of Reform Unacceptable

Topics: Budget, Employer Health Assessment

Governor, Business Community Reach Compromise on Health Assessment

Posted by Katie Holahan on Jun 20, 2017 2:00:00 PM

The Massachusetts business community has agreed to support a broad compromise plan to stabilize the Massachusetts Medicaid and Unemployment Insurance systems while offseting a two-year employer health-care assessment with savings elsewhere.

Baker.2017.jpgThe complex agreement, developed after months of intensive negotiations between the Baker Administration and the business community, would make structural changes to the MassHealth program to reduce ongoing financial shortfalls in the state/federal insurance program for low-income people. There would also be cost-saving changes to the commercial health-insurance markets, including increased incentives for patients to seek care at high-quality community hospitals.

The plan would use a temporary employer health assessment as “bridge financing” to capitalize the MassHealth program until the long-term reforms are implemented. The assessment would raise $200 million annually through the Employer Medical Assistance Contribution (EMAC) and fall most heavily on companies where employees use MassHealth instead of an employer health plan.

The assessment would be offset by a two-year Unemployment Insurance rate adjustment that would save employers $335 million over two years versus current rates.

The administration announced the agreement today in a letter to the chairs of the Legislature’s Joint Committee on Ways and Means.

“The comprehensive plan moderates the employer assessment that was originally proposed in January while offering the opportunity for meaningful structural reforms to the health insurance system and rate relief within the Unemployment Insurance system,” said Richard C. Lord, President and Chief Executive Officer of AIM.

The compromise will require approvals both from the Massachusetts Legislature and from federal officials.

Here are the key elements of the agreement:

MassHealth/Medicaid

  • Moves 140,000 people who are above the federal poverty level out of Masshealth and into the Connector market;
  • Restructures MassHealth coverage for non-disabled adults to look like commercial insurance coverage;
  • Shifts 30,000 MassHealth members from standard MassHealth coverage, which includes coverage for long-term care, into Careplus, which does not;
  • Adds co-pays for MassHealth members;
  • Requires the commonwealth to petition the federal government to re-establish the prohibition against employees who are offered affordable health insurance by an employer from seeking coverage through MassHealth.

Commercial Market Reforms

  • Imposes a five-year moratorium on insurance mandates (requires change to state law);
  • Increases the required premium differential for tiered network plans from the current 14 percent to 28 percent. (requires state law change);
  • Promotes transparency tools for employers and consumers. (requires state law change);
  • Increases access to lower-cost providers by expanding the scope of practice for optometrists, podiatrists and advanced practice registered nurses (APRN) and creating a new mid-level provider - dental therapists. (requires state law change).

Employer Assessment:

  • Applies to employers with six or more employees (both full and part-time);
  • Increases the EMAC contribution rate for all employees, statewide. Additional annual two-tiered assessment on any employees receiving health insurance through public programs.
  • Tier 1 is broad based, raising the current EMAC rate from 0.34 percent to 0.51 percent of annual wages, up to the annual wage cap of $15,000. Applies to all employers currently subject to EMAC; raises the maximum per-employee contribution rate from $51 to $77; state expects to annually collect $75M under this tier;
  • Tier 2 introduces a targeted payment that would require employers to pay an additional 5 percent of annual wages for each non-disabled employee on public coverage, up to the annual wage cap of $15,000; applies to all employers currently subject to EMAC with non-disabled employees on MassHealth (not in premium assistance) or subsidized Connector coverage (ConnectorCare); Tier 2 would result in an annual maximum per employee contribution rate of $750; state expect to collect an estimated $125M in Fiscal Year 2018 under this tier; the estimate is dependent upon the actual number of individuals on public coverage.
  • Waiver applies for anyone receiving insurance through parent, spouse or other household member;
  • Implementation date of January 1, 2018 and a sunset date two years later.

Unemployment Insurance

  • An automatic increase of three levels to schedule F due to take effect on January 1 would be replaced with a one-level jump to schedule D for 2018 and another single increase to schedule E for 2019.

Governor Baker in January proposed to close a $600 million shortfall in MassHealth by levying a $2,000-per-employee fee upon companies at which at least 80 percent of full-time worker equivalents do not take the company’s offer of health insurance, or do not make a minimum contribution of $4,950 annual contribution for each full-time worker. AIM opposed that plan because it would penalize the majority of companies that provide good health insurance to their workers.

Topics: Controlling Health Care Costs, Charlie Baker, Employer Health Assessment

Senate Creates Roadmap for Debate on Employer Assessment

Posted by Katie Holahan on May 16, 2017 3:36:24 PM

The Massachusetts Senate today sought to define the process through which the Baker Administration might require employers pay for a shortfall in the MassHealth program.

statehousedome.jpgThe proposed Fiscal Year 2018 budget released by the Senate Ways & Means Committee gives the administration a choice of increasing the Employer Medical Assistance Contribution (EMAC) or creating a stand-alone quarterly assessment on employers.

The Senate envisions raising $180 million from such assessments versus the $300 million contained in the governor’s budget. Senators would also limit the life of those assessments to two years.

The approach of creating a roadmap for the administration is similar to the one adopted earlier by the House of Representatives, through the specifics of each proposal differ.

“The Senate Ways & Means Committee took a step in the right direction today by outlining a thoughtful and transparent approach to closing the Medicaid budget deficit. Employers are particularly encouraged that the committee’s budget proposal would raise $180 million from employers instead of $300 million; would provide the Baker Administration with the flexibility to find a solution; and would sunset any employer assessments,” said Richard C. Lord, President and Chief Executive Officer of Associated Industries of Massachusetts.

“The Senate plan again reminds us that the only long-term solution to the Medicaid funding issue is to redouble efforts to control the cost of providing health insurance to our low-income neighbors. Without such an effort, the Medicaid budget gap will continue to grow and divert precious resources from other priorities such as education and infrastructure.”

Lord also urged the Senate to add a provision that would require the Baker Administration to seek a federal waiver allowing Massachusetts to prevent people who receive an offer of health insurance from their employers from purchasing insurance through MassHealth.

The Senate proposal would require Secretary of Administration and Finance Kristen Lepore to file a letter with the Legislature by August 1 indicating whether she will choose the EMAC or assessment option. Regulations must be published by November 1 and take effect January 1 of next year.

Secretary Lepore could either increase the employer assessment for EMAC, an obscure program originally meant to provide health insurance to unemployed people, from .34 percent to .75 percent, or establish a separate employer assessment based upon whether or not an employer offers qualified health insurance and has a minimum uptake rate for that insurance.

The secretary would have  to consider the following in developing any assessment:

  1. how much the employer pays toward the employee’s insurance;
  2. how many employees they have;
  3. whether or not their employees are Massachusetts residents;
  4. how many employees are part-time
  5. whether or not their employees have access to health insurance through different private sources, like parental, spousal, veteran’s, or Medicare, for example.

Governor Baker originally proposed 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.

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 federal health care reform. Federal reform made access to health insurance an entitlement based on expanded income eligibility and significantly expanded the roles of people on Medicaid.

The full Senate will vote on the Medicaid assessment proposal and the rest of its Fiscal Year 2018 budget blueprint later this week. House and Senate will then meet to work out differences.

 

Topics: Massachusetts senate, Health Care Costs, Employer Health Assessment

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