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MassMutual CEO Provides Formula for Growth

Posted by Christopher Geehern on Nov 22, 2019 11:32:27 AM

The chief executive of a company creating thousands of jobs in Massachusetts believes the commonwealth can continue to prosper by addressing key issues such as housing, transportation and education.

Roger W. Crandall, President and Chief Executive Officer of Springfield-based MassMutual, told the AIM Executive Forum this morning that Massachusetts benefits from a bi-partisan and balanced public-policy approach to business.

“Massachusetts has the best of everything. It has an unbelievable history. We've had an unbelievable run over the last 10, 15, 20 years and I think we've got another unbelievable 10, 20, 25 years in front of us,” Crandall told an audience of 250 business leaders.

MassMutual, which oversees more than $500 billion in assets, has embarked upon a major expansion in Massachusetts that includes a new, 17-story tower now under construction on the South Boston Waterfront that will accommodate approximately 1,000 employees. The company is also adding 1,500 jobs to its Springfield headquarters.

Crandall said Massachusetts has generally done a good job providing support and resources for business development while maintaining a good quality of life for its residents. One key element of that quality of life is housing, he said, that that is a challenge moving forward.

Moderately priced housing is essential to retaining the talented employees who graduate from the commonwealth’s renowned colleges and universities, Crandall said. The price of housing in Boston has increased by 61 percent during the past decade and the average monthly rent in the city now stands at $2,500.

MassMutual has supported Governor Charlie Baker’s Housing Choice Bill, along with proposals to create a $10 million down-payment assistance program for first-time home buyers. The company separately contributes to Boston Mayor Marty Walsh’s Way Home Fund to provide homeless people with a safe and stable environment in which to rebuild their lives.

“We are supportive of efforts to create more housing,” Crandall said.

On transportation, Crandall said companies cannot afford to lose employees – or fail to attract new ones – because people are unable to get where they need to go. He urged employers to support investment in the MBTA and made an impassioned plea for the development of high-speed east-west rail to connect Boston and Springfield.

The final major issue on MassMutual’s priority list is education. Crandall said Massachusetts must continue to pay attention to maintaining best-in-the-nation educational institutions at all levels that provide young people with the skills that will be needed to drive the innovation economy. He commended the Massachusetts Legislature for passing an education funding bill with strong accountability provisions.

“The future is a future of human capital,” he said.

MassMutual was founded in 1851 when 31 founders pooled together $100,000 to write insurance policies for friends and neighbors. The company now pays out more than $14 million per day in life-insurance, retirement and other benefits to customers.

 

Topics: Massachusetts economy, Education, AIM Executive Forum, Transportation

Education Bill Contains Business-Backed Standards

Posted by Katie Holahan on Nov 21, 2019 11:36:35 AM

The Massachusetts Legislature yesterday approved a $1.5 billion education-funding bill that includes measures supported by the business community allowing the state to hold school districts accountable for how they spend the money.

State House 2015The bill, which now heads to Governor Charlie Baker for his consideration, will align community needs with goals and outcome-based measurements, creating an education system that is responsive to the demands of the future workforce.  AIM has long insisted that preparing students for college and the workforce remain a vital component of the education-funding discussion.

“By requiring school districts to consider how they might best prepare students for both college and careers, and by collecting and reporting on important data metrics, the conference committee report strengthens our ability as a commonwealth to support students as they choose from diverse opportunities after high school,” AIM President and Chief Executive Officer John Regan wrote in a letter to lawmakers this morning.

“Our efforts to enhance students’ economic opportunities should not end at graduation.  There is still much important work to be done to close racial and socio-economic achievement gaps and bring more career-connected learning to Massachusetts schools. Employers across the commonwealth are proud to be part of this continued effort and discussion.” 

The final version of the bill emerged this week from a House-Senate conference committee. The House passed a version in October that included strong accountability measures, but the Senate version omitted some of those measures.

Education matters to Massachusetts employers because the commonwealth’s highly regarded schools provide a competitive advantage over other states and countries. AIM’s member companies, however, have become increasingly concerned that Massachusetts students are graduating from high school without the knowledge and skills they need to enter the workforce or to succeed in college. 

At the same time, businesses report a persistent shortage of qualified candidates to fill open jobs, many of which pay high wages in growing industries. The skills shortage appears to be impeding economic growth and expansion - the state economy contracted modestly during the third quarter because of workforce capacity limits.

AIM applauds the House and a Senate for their passage and urges Governor Baker to sign the education funding bill.

Topics: Education Reform, Education, Workforce Training

Time to Pass the US-Mexico-Canada Trade Agreement

Posted by Kristen Rupert on Nov 19, 2019 9:00:00 AM

Associated Industries of Massachusetts and its 3,500 members today urged the United States Congress to approve the new USMCA trade agreement with Canada and Mexico.

international.flagssmallThe reason is simple - Canada and Mexico purchase more US-made goods than the next 11 trading partner countries combined. USMCA will help to preserve more than 2 million American manufacturing jobs - at least 15,000 of them in Massachusetts - that rely on trade with Canada and Mexico.

Time is short for Congress to act. The US House and Senate need to pass the USMCA before year-end.

House Speaker Nancy Pelosi has said Democrats have inched closer to supporting the deal. They have worked to iron out lingering concerns in weeks of talks with the Office of the U.S. Trade Representative. 

The USMCA was negotiated by the Trump Administration to replace the North American Free Trade Agreement (NAFTA). USMCA strengthens and modernizes intellectual property rules, sets new digital economy standards, expands US manufacturers’ access to Canada and Mexico, ensures that US companies can sell their products duty-free into these markets, eliminates red tape at the border, and levels the playing field by raising standards, prohibiting anti-US discrimination, and strengthening enforcement. 

AIM is in contact with the Massachusetts Congressional delegation to encourage them to pass the USMCA.  Governor Charlie Baker calls the agreement “strong, fair and flexible.”  Among the many products that are traded between Massachusetts and Canada/Mexico are auto parts, medical devices, lab instruments, semiconductors, paper products and aerospace parts. Most of the manufacturing exports from Massachusetts going to Canada and Mexico are produced by small and medium-size businesses.

AIM urges employers to contact their members of Congress to emphasize how important the USMCA is to manufacturing companies in Massachusetts.   Use this link, shared by the National Association of Manufacturers.

Industry associations, individual companies and elected officials across the US encourage an immediate vote on USMCA.  And while the USMCA is serious business, check out this light-hearted take on why USMCA is so important.

Topics: International Trade, U.S. Congress

House Makes Wise Choice to Postpone Transportation Debate

Posted by Robert Rio on Nov 18, 2019 8:00:00 AM

The Massachusetts House of Representatives has postponed until January its debate on how to overhaul the commonwealth’s transportation system.

trafficsmallHouse Speaker Robert DeLeo said Thursday that lawmakers initially planned to take up the transportation debate next week, but wanted more time to digest an enormously complex and contentious issue.

"…We decided that it's better that we try to get this right than to try to comply with, I guess you could say, a somewhat arbitrary deadline," DeLeo told State House News Service.

The Legislature is set to recess on Nov. 20 and resume formal sessions in January. While the House and Senate will continue to meet in informal sessions through December, anything that requires a roll call vote must wait.

Associated Industries of Massachusetts, which supports a reasoned, long-term approach built around Governor Charlie Baker’s $18 billion transportation bond bill, commended the House for its decision to push back the debate.

“We appreciate that the Speaker and his members are being thoughtful about this complex issue of transportation reform. Taking additional time to weigh all options is the best path forward for the Commonwealth,” said Brooke M. Thomson, Executive Vice President of Government Affairs at AIM.

“AIM will be working with House members as they continue to look at this issue.”

AIM and ist 3,500 member employers believe the first step to transportation reform must be to remove the structural impediments that prevent the Department of Transportation and the MBTA from spending the money that the taxpayers have already given them. Analysis of MBTA spending patterns reveals that budgeted capital expenditures have risen from less than $500 million in 2013 to $851 million in 2018, but the T still fell short of the $1.6 billion that was available in 2019.

AIM respectfully disagrees with those who support raising new revenue immediately through a gasoline or other tax for the transportation system. Raining money on a transportation system without updating outmoded procurement regulations and rules governing public-private partnerships is like putting brand-new rail cars on corroded 19th century tracks.

AIM is open to reducing transportation emissions by supporting the Transportation Climate Initiative (TCI), a regional collaboration of 12 Northeast and Mid-Atlantic states and the District of Columbia that seeks to improve transportation, develop the clean-energy economy and reduce carbon emissions from the transportation sector.

Topics: Massachusetts House of Representatives, Taxes, Transportation

Resilient Economy Boosts Business Confidence

Posted by Christopher Geehern on Nov 12, 2019 8:00:00 AM

Business confidence strengthened in Massachusetts last month amid signs that the state and national economies are more resilient than many experts predicted.

BCI.October.2019The Associated Industries of Massachusetts Business Confidence Index (BCI) rose 2 points to 60.9 last month, leaving it virtually even with its level of a year ago.

The October upswing was led by growing employer optimism in the Massachusetts and national economies, as well as brightening prospects for manufacturers.

The survey results came during a month when US employers added a stronger-than-expected 128,000 jobs. And while the Massachusetts economy contracted slightly during the third quarter, experts say the reversal reflects workforce capacity limits rather than an economic downturn.

“U.S. hiring was unexpectedly resilient in October and prior months saw upward revisions. It appears that consumers will extend the record-long expansion despite trade tensions and weak business investment,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA).

The AIM Index, based on a survey of more than 100 Massachusetts employers, has appeared monthly since July 1991. It is calculated on a 100-point scale, with 50 as neutral; a reading above 50 is positive, while below 50 is negative. The Index reached its historic high of 68.5 on two occasions in 1997-98, and its all-time low of 33.3 in February 2009.

The Index has remained above 50 since October 2013.

Constituent Indicators  

The constituent indicators that make up the Business Confidence Index all moved higher during October.

The Massachusetts Index assessing business conditions within the commonwealth surged 4.5 points to 67.8 while the US Index rose 3.1 points to 59.6. The increase left the Massachusetts reading 3 points higher than a year ago; the US index has dropped by 2 points during the past 12 months.

The Future Index, measuring expectations for six months out, gained 2.2 points to 58.6, virtually even with its reading from October 2018. The Current Index, which assesses overall business conditions at the time of the survey, increased 2.0 points to 63.3, also matching its reading of a year ago.

The Employment Index rose slightly by 0.3 points for the month but remained down 2.5 points for the year, underscoring the capacity issues faced by employers struggling to find qualified workers in a full-employment state economy.

Non-manufacturers (63.4) were more confident than manufacturers (59.0), despite a strong October gain in optimism among industrial companies. Small companies (63.6) were more optimistic than medium-sized companies (60.6) or large companies (59.6). Companies in Eastern Massachusetts (61.2) remained more optimistic than those in the west (60.4).

Paul Bolger, President, Massachusetts Capital Resource Company and a BEA member, said employers appear to have concluded that the slowing economy remains fundamentally strong enough to make a recession unlikely in the near future.

“Companies are also hoping that a preliminary trade agreement between China and the United States will clear up some of the uncertainty that has been causes by tariffs and an escalating trade battle,” Bolger said.

Business Battens the Hatches

AIM President and CEO John R. Regan, also BEA member, said the persistent shortage of skilled workers constraining the Massachusetts economy underscores the need for the Legislature to pass an education funding bill that establishes accountability for school districts to prepare students for both college and the workforce. 

“The job of sustaining Massachusetts’ global leadership in innovation belongs to everyone, and that requires a thoughtful, long-range plan to maintain our competitive advantage, including our education system. The foundation of such a plan is a set of educational standards that ensure our students’ continued achievement via distinct criteria,” Regan said.

“Whether Massachusetts high school graduates choose a college track or enter the workforce directly upon graduation, we must remain vigilant and insist on relevant, high standards to provide all our students with equal access to the economic advantages that follow educational achievement.”

Topics: AIM Business Confidence Index, Massachusetts economy, Massachusetts employers

Congratulations to Top Women-Led Companies

Posted by John Regan on Nov 8, 2019 10:59:02 AM

TopWomenLedBusinesses2019

AIM directors and staff gathered today to honor member companies included in the Commonwealth Institute/Boston Globe 2019 list of Top-Women-Led Businesses in Massachusetts. Left to right, AIM Director Emily Reichert, CEO of Greentown Labs; AIM Director Janice Goodman, Owner, Cityscapes; AIM Chief Financial Officer Cindy Lyman; AIM Diversity Consultant Juliette Mayers, CEO of Inspiration Zone; AIM Board Chair Joanne Hilferty, President & CEO of Top 100 honoree Morgan Memorial Goodwill Industries; AIM Treasurer Dennis Leonard, President & CEO of Delta Dental of Massachusetts; and AIM Executive Vice President of Government Affairs Brooke Thomson.

 

Associated Industries of Massachusetts congratulates 15 member employers named to the 2019 Top 100 Women-Led Businesses list released today by The Commonwealth Institute and The Boston Globe.

The companies range from financial services giant Fidelity Investments to construction firm E.T. & L. Corporation. Five of the companies are led by members of the AIM Board of Directors – Morgan Memorial Goodwill Industries of Boston, Joanne Hilferty, President and CEO; Lancaster Packaging Inc., Marianne Lancaster, Founder and President; Onyx Specialty Papers of South Lee, Patricia Begrowicz, President; Sensata Technologies, Martha Sullivan, President and CEO; and United Personnel Services Inc., Tricia Canavan, President and CEO.

“The companies on this list represent the best of the Massachusetts business community,” said John Regan, President and Chief Executive Officer of Associated Industries of Massachusetts.

“The women who own or run these companies have not just shattered glass ceilings but built their businesses in a manner that creates economic opportunity for all Massachusetts residents.”

AIM members on the list are:

  • Children's Hospital, Sandra Fenwick, President & COO
  • Catholic Charities of Boston, Debbie Rambo, President
  • Comcast (Greater Boston), Tracy Pitcher, Senior Vice President, Greater Boston
  • ET&L Corp, Jennie Colosi, President & Treasurer
  • Elaine Construction, Lisa Wexler, President
  • Fidelity Investments, Abigail Johnson, President & CEO
  • John Hancock, Marianne Harrison, CEO
  • Lancaster Packaging Inc., Marianne Lancaster, Founder & President
  • Lasell Village Inc., Anne Doyle, President
  • Massachusetts Medical Society, Lois Dehls Cornell, Executive Vice President
  • Morgan Memorial Goodwill Industries, Joanne Hilferty, President & CEO
  • Onyx Paper, Patricia Begrowicz, President
  • Sensata Technologies, Martha Sullivan, President & CEO
  • United Personnel Services, Tricia Canavan, President & CEO
  • UMass Lowell, Jacquie Moloney, Chancellor

The honorees were announced this morning at The Commonwealth Institute/Boston Globe Top 100 Women-Led Businesses breakfast.

Topics: Massachusetts employers, Diversity & Inclusion

House Education Bill Stresses Accountability

Posted by Katie Holahan on Nov 5, 2019 11:32:10 AM

Associated Industries of Massachusetts yesterday commended the state House of Representatives for passing an education funding bill that establishes accountability for school districts to prepare students for both college and the workforce.  

Education“The job of sustaining Massachusetts’ global leadership in innovation belongs to everyone, and that requires a thoughtful, long-range plan to maintain our competitive advantage, including our education system. The foundation of such a plan is a set of educational standards, like those contained in House bill 4145, that ensures our students’ continued achievement via distinct criteria,” AIM President and Chief Executive Officer John Regan wrote in a letter to House Speaker Robert DeLeo and members of the House.

“Whether Massachusetts high school graduates choose a college track or enter the workforce directly upon graduation, if we do not remain vigilant and insist on relevant, high standards, we will fail to provide all our students with equal access to the economic advantages that follow educational achievement at all levels.”

The letter conveys the appreciation of AIM’s 3,500 member employers to Speaker DeLeo, House Education Chair Alice Peisch, and House Ways & Means Chair Aaron Michlewitz for legislation that aligns community needs with goals and outcome-based measurements.

The Massachusetts House voted unanimously on October 23 to pass a $1.5 billion education funding bill with measures allowing the state to hold school districts accountable for how they spend the money. A version of the reform passed by the state Senate removed some of those accountability measures and a conference committee is now trying to iron out the differences.

AIM’s member companies have become increasingly concerned that Massachusetts students are graduating from high school without the knowledge and skills they need to enter the workforce or to succeed in college. 

At the same time, businesses report a persistent shortage of qualified candidates to fill open jobs, many of which pay high wages in growing industries. The skills shortage appears to be impeding economic growth and expansion - a MassBenchmarks report last week showed that the state economy contracted modestly during the third quarter because of workforce capacity limits.

Education matters to Massachusetts employers because it is where we shine as a state and have a competitive advantage over other states and countries.

The House education funding bill, AIM writes in its letter, would allow employers throughout Massachusetts “to hire tomorrow’s work force with confidence, knowing that these potential employees have received the best educational opportunities available.”  

AIM Backs Reasoned, Long-Term Approach to Transportation

Posted by Brooke Thomson on Oct 30, 2019 7:08:11 AM

Virtually everyone in Massachusetts agrees that the commonwealth must repair, update and rethink its transportation system.

trafficsmallJust ask employers in metropolitan Boston where workers navigate daily reliability issues on the MBTA or persistent congestion on the Southeast Expressway. Or manufacturing companies in the Berkshires that struggle to ship products over back roads to the Turnpike. Or restaurants on the Cape that await customers locked in multi-mile backups over the Sagamore or Bourne bridges.

Improving the complex Massachusetts transportation system will require patience, prudence and compromise to reach a solution that lays the foundation for long-term economic growth. The 3,500 members of Associated Industries of Massachusetts know as business people that sorting out the financial, logistical and operational elements of transportation reform will take years of debate and continued analysis.

AIM supports a reasoned, long-term approach built around Governor Charlie Baker’s $18 billion transportation bond bill now pending in the state Legislature. That bond bill acknowledges what Transportation Secretary Stephanie Pollack told the AIM Executive Forum in September – the first step in any reform must be to remove current structural impediments that prevent the Department of Transportation and the T from spending the money that the taxpayers have already given them.

AIM believes that Massachusetts policymakers must provide procurement and policy reform to the transportation system before investing money into an outdate infrastructure.

AIM believes that any solution to the transportation issue must factor in the need to reduce greenhouse gases in the transportation sector to comply with state laws to reduce global warming. 

AIM supports transportation initiatives that are fair to people of all income levels and all regions of the commonwealth.

AIM acknowledges that the commonwealth may need to develop more revenue for transportation in the next three to four years once structural reforms have been accomplished. More work needs to be done to determine the best method of raising revenue and AIM recommends a deliberate approach to funding issues.

Here is AIM’s position on transportation:

AIM supports policies and responsible new investment to reduce congestion; grow capacity to deliver capital projects; lower carbon emissions in the transportation sector and ensure accountability and transparency in transportation investment spending.

  • AIM supports the governor’s bond bill – specifically those provisions that provide employer tax incentives, address congestion and put in place new Department of Transportation (MassDOT) and MBTA management and procurement tools;
  • AIM emphasizes the importance of procurement and contracting reform to get money flowing to projects at an accelerated rate. We support creating $1.4 billion in additional MBTA capital availability by changing the $127 million in annual appropriations to contract assistance or by increasing the annual Base Revenue Amount and Dedicated Sales Tax Revenue amount to the MBTA by $127 million.
  • AIM is open to reducing transportation emissions by supporting the Transportation Climate Initiative (TCI), a regional collaboration of 12 Northeast and Mid-Atlantic states and the District of Columbia that seeks to improve transportation, develop the clean-energy economy and reduce carbon emissions from the transportation sector.
  • AIM remains concerned about raising the gasoline tax because it is regressive and has a punitive effect on less populated regions of the commonwealth;
  • Because AIM is the statewide business association, we support a transportation plan that meets in a fair manner the diverse needs of all regions of the commonwealth;
  • AIM supports studies exploring congestion pricing as a means of reducing or mitigating congestion. Congestion pricing must apply equally to all industries and all types of vehicles and not target specific industries such as ride-sharing companies;
  • AIM supports policies that add governance structures to ensure accountability and transparency in transportation revenue spending;
  • AIM supports $105 million in transportation funding in the supplemental budget currently in conference committee on Beacon Hill: $50 million for MBTA, $40 million for Chapter 90, $10 million for municipal complete streets program.

The AIM Board of Directors continues to discuss details of a transportation proposal. The ongoing discussion reflects the importance that the Board attaches to the transportation debate.

Please contact Bob Rio, Senior Vice President, rrio@aimnet.org, for updates on the transportation debate.

Topics: Massachusetts Legislature, Transportation, Charlie Baker

Three Companies Earn AIM Global Trade Awards

Posted by Kristen Rupert on Oct 24, 2019 2:00:00 PM

Associated Industries of Massachusetts announced the winners of the 24th annual AIM Global Trade Awards, which recognize Massachusetts companies and public agencies of all sizes that have demonstrated excellence in international business. The 2019 honorees represent both Massachusetts manufacturing and professional service industries and include: Crane Currency, Globalization Partners, and SMC Ltd.

CraneCurrency“From the more traditional manufacturing activities to our talent economy, Massachusetts companies are innovative global leaders; international trade is a pivotal aspect of the Commonwealth’s overall business community,” said John Regan, President and CEO of AIM. “We are delighted to honor the 2019 winners, who from innovative product development to best-in-class manufacturing make a true impact on global business. In a time when international trade is at the forefront of national and international conversation, we are proud to show support for the important role of global business in our economy.”

The three Global Trade Award winners will be honored during the AIM Global Trade Symposium & Awards Breakfast on Thursday, November 7 from 7:30-10:30am at Granite Links Golf Club in Quincy.  The event will feature keynote speaker Martha Sullivan, President and CEO of Sensata Technologies.  A lively panel discussion highlighting the perspectives of several global business leaders including Harriet Cross, UK Consul General in Boston and Professor Ravi Ramamurti, Director of the Center for Emerging Markets at Northeastern University, will follow the keynote. 

The AIM Global Trade Symposium & Awards is sponsored by Massport, The Provident Bank, MassMEP and M&T Bank.

Chairman’s Award: Crane Currency, Dalton & Boston

Founded in Massachusetts in 1801, Crane Currency is still headquartered in Massachusetts today. Crane Currency designs, manufactures, and prints high-quality and highly secure bank notes. The paper for all US currency is manufactured by Crane Currency’s 300 employees in Dalton.  The company has a long history of innovation and is known for its state-of-the-art security technology.  Crane Currency acquired a manufacturing facility in Sweden in 2002 and, most recently, built a state-of-the-art printing and technical center in Malta, where it produces bank notes for the central banks of over 50 countries.  Annemarie Watson is president of Crane Currency.

https://www.cranecurrency.com/

Diplomat’s Award: Globalization Partners, Boston

Globalization Partners, a global professional employer organization founded in Boston in 2011 by CEO Nicole Sahin, has grown rapidly in just eight years and now has regional hub offices in eight international locations: United Kingdom, Germany, United Arab Emirates, India, Shanghai, Singapore, Brazil, and Mexico. Approximately half of the company’s nearly 200 worldwide employees work in the Boston headquarters.  The services and technology platform developed by Globalization Partners enables companies to hire talent in more than 170 countries within days, without the need to set up costly international subsidiaries.  The company provides a cost-efficient solution for US businesses wanting to test new markets. 

https://www.globalization-partners.com/

Ambassador’s Award: SMC, Ltd., Devens, MA

SMC Ltd. is a global contract manufacturer of single use, finished medical devices.  The company was founded in 1988 by Chetan N. Patel, a graduate of UMass Lowell who grew up in India. SMC has over 350 employees in Massachusetts and 2,000 employees worldwide.  More than half of the company’s clients are headquartered internationally and include well-known European pharmaceutical and diagnostic companies.  SMC, with support from MassDevelopment, recently invested in a state-of-the-art manufacturing facility in Devens where the company does design, molding and assembly.  Its high-speed automation processes enabled the company to extend its product line to include drug delivery within devices.  Approximately one-third of product that is manufactured in Massachusetts goes to international markets.

https://www.smcltd.com/

The AIM International Business Council helps Massachusetts companies engage in international trade and expand their global business activities. Through seminars, referrals, and e-newsletters, the AIM International Business Council provides companies with the resources they need.  Visit www.aimnet.org/international.

Topics: International Trade, AIM International Business Council

Health Spending Hits Benchmark, but Employer Premiums Rise

Posted by Katie Holahan on Oct 21, 2019 8:30:00 AM

Spending on health care in Massachusetts met a key state benchmark for 2018, but employers and their workers continued to pay significantly more for health insurance coverage, according to a new report.

health_careThe Massachusetts Center for Health Care Information and Analysis (CHIA) reported last week that health-care spending increased 3.1 percent from 2017-2018, equal to the goal established under the 2012 state Health Care Cost Control law.

But insurance premiums soared 5.2 percent, while the amount of cost-sharing assumed by employees rose 6.1 percent. Wages and salaries grew 2.8 percent during the same period as health costs continued to outpace earnings.

“The cost of providing health insurance remains a priority concern for Massachusetts employers. The report underscores the need to ensure that the prices paid by employers and their workers reflect the overall trends in health-care costs,” said Brooke Thomson, Executive Vice President of Government Affairs at AIM.

CHIA released its report last week in advance of the annual Cost Trends Hearings in Boston on Tuesday and Wednesday. Several AIM-member employers are scheduled to testify.

Among the highlights:

Below are a number of highlights with particular relevance for employers:

  • Premiums for fully insured plans in 2018 increased 5.6 percent after rising 4.9 percent in 2017.
  • Cost-sharing rose along with premiums by 5.5 percent in 2018, after a 6.5 percent increase in 2017. Fully insured members paid more and experienced faster cost increases than members in self-insured plans.
  • Enrollment in high deductible health plans (HSHP) surged 31.5 percent. The increase was especially pronounced among small businesses. Meanwhile, enrollment in tiered and limited network plans remained largely the same.
  • Total expenditures for MassHealth – the state’s public health insurance program for low-income people – remained flat while the number of people enrolled in MassHealth decreased.
  • Net of prescription drug rebates, pharmacy spending was $8.1 billion, an increase of 3.6 percent from the prior year.
  • Hospital services, physician, and pharmacy expenditures continued to be the largest service categories of Total Health Care Expenditure (THCE) spending.

About three in five Massachusetts residents are covered through private health insurance. More than 93 percent of those in private health insurance receive coverage through their employer.

Sixty percent of private commercial health insurance members were enrolled in self-insured ESI plans. In the commercial market, approximately 60 percent of people were self-insured through either a large employer or the Group Insurance Commission.

AIM and its member employers have launched several initiatives to control health spending, including an effort to reduce inappropriate use of emergency departments by 20 percent in two years. State officials estimate that a significant number of ED visits are potentially avoidable, a pattern that costs $300-$350 million annually for commercially insured members.

Governor Charlie Baker on Friday introduced a sweeping health care bill that puts a new focus on primary and mental health care, while reining in physician and hospital billing practices, penalizing drug companies that sharply increase prices, and infusing struggling community hospitals with new funds. It would prohibit surprise medical bills for emergency and unplanned services, and it would limit the use of hospital facility fees. 

“The year 2018 marked the second consecutive year in which employers and workers did not see the full benefit of moderating health-care spending. Massachusetts cannot continue to support a system in which the premiums paid by employers and their workers rise faster than the underlying cost of health care,” said John Regan, President and Chief Executive Officer of AIM.

Editor's note - Contact Katie Holahan at keh@aimnet.org to receive updates on health costs in Massachusetts.

Topics: Health Care Costs, Health Insurance, Health Care

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