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.
“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.