AIMBlog_Logo_Resized

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

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

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

House Establishes Process to Study Health Assessment

Posted by Katie Holahan on Apr 10, 2017 1:08:24 PM

The Massachusetts House Ways and Means Committee wants the Baker Administration to examine the assumptions underlying its controversial proposal to have employers pay for a shortfall in the MassHealth program.

StateHouse-resized-600.pngThe proposed Fiscal Year 2018 budget released by the committee today would create a six-month review of the $2,000-per-employee “Fair Share Assessment” that the administration included in its own budget proposal in January.

The House plan would require the administration to conduct public hearings and determine the potential effect of the assessment on small business. It would also limit the definition of a full-time employee in any assessment by excluding temporary and seasonal employees.

Perhaps most importantly, the House envisions that any assessment would generate $180 million instead of the $300 million initially projected by the administration. MassHealth is the commonwealth’s Medicaid health-insurance program for low-income people.

“The issues surrounding the MassHealth deficit and the proposed employer assessment are extraordinary complex. We believe the House proposal lays out a prudent process for reviewing the issue in a manner that will allow AIM to continue its ongoing discussions with lawmakers and the administration,” said Richard C. Lord, President and Chief Executive Officer of AIM.

The administration’s plan would impose 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.

The employer assessment represents an expansion of the so-called fair share contribution plan that was a linchpin of the 2006 universal health care law in Massachusetts before it was repealed to make way for the federal Affordable Care Act (ACA). 

The House Ways and Means budget will require the administration to consider the following factors in developing any sort of health-care assessment on businesses in Massachusetts.

  • What a reasonable utilization (uptake) rate might be by reviewing other entities, such as the Group Insurance Commission;
  • Whether employees receive premium assistance through MassHealth;
  • Whether employees receive primary MassHealth benefits;
  • Whether employees receive insurance from other, non-MassHealth sources (spousal; parental; veterans);
  • Whether employees are residents of the commonwealth (and thus eligible for MassHealth);
  • What average Massachusetts employer contribution rates might be.

The review of the proposed assessment would involve multiple state agencies, including the Executive Office of Health and Human Services, the Department of Revenue (DOR), the Health Connector, the Division of Unemployment Assistance, the Center for Health Information and Analysis, and MassHealth.

A public hearing on proposed regulations must be held by the first week in October 2017.

The administration would be required to implement all regulations relative to an assessment by November 1. Full implementation of any resulting policy would occur on January 1, 2018. A small-business impact statement must be filed.

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

The House budget would require the administration to seek an ACA waiver that would allow the original prohibition to be reinstated.

Topics: Budget, Health Care Costs, Massachusetts House of Representatives

State Tightens Standard for Health Cost Growth

Posted by Katie Holahan on Mar 29, 2017 1:21:55 PM

The Massachusetts Health Policy Commission voted unanimously today to lower the state’s objective for the growth of health-care expenditures from 3.6 percent to 3.1 percent beginning in 2018.

HPC.jpgThe vote marks a significant milestone for employers and consumers struggling with the soaring cost of health insurance. AIM President and Chief Executive Officer Richard C. Lord, who represents employers on the Health Policy Commission, has been a vocal supporter of lowering the benchmark and voted in favor of the 3.1 percent level.

“Today’s vote represents a concrete, measurable step toward moderating the type of premium increases that give employers a knot in their stomachs when they look at their insurance renewals,” Lord said.

“The action will ultimately mean more than all the sound and fury over national health reform in Washington."

The spending growth benchmark, established as part of the health-cost control law of 2012, is a critical component for understanding year-over-year increases in health-care spending. AIM has always favored an aggressive goal – the organization joined with the Greater Boston Interfaith Organization in 2012 to support setting the health-care cost growth benchmark at two percentage points below the growth in the state’s economy.

The association ultimately supported the establishment of a 3.6 percent benchmark because it recognized the vital importance of creating a standard to measure cost-containment efforts.

But Massachusetts has not yet seen sufficient progress. The commonwealth has exceeded the 3.6 percent benchmark in two of the past three 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 unsustainable cost increases are occurring in an industry where experts agree that at least a 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,” Lord said.

AIM is also addressing the health cost issue by supporting new research conducted by the Health Policy Commission suggesting that Massachusetts could reduce total health-care expenditures anywhere from $279 million per year to $794 million per year, or 0.5 to 1.3 percent, by making seven improvements to the health-care system.

The improvements:

  • Shift community appropriate care to community hospitals – Reduce by 5-10 percent the number of cases treated at teaching hospitals that would be more appropriately treated at community hospitals. Savings: $43 million to $86 million.
  • Reduce hospital readmissions – Cut the 2015 hospital readmission rate from 15.8 percent (78,000 readmissions) to a range of 15 to 13 percent. Savings: $61 million to $245 million.
  • Reduce avoidable emergency room visits – More than 900,000 emergency room visits during 2015 were considered avoidable. Shift 5-10 percent of those avoidable visits to lower-cost settings. Savings: $12 million to $24 million.
  • Reduce use of institutional post-acute care – Redirect 5-21 percent of the patients who currently leave hospitals to go to institutional rehabilitation facilities into home care. Savings: $46.6 million to $186 million.
  • Provide incentives for consumers to choose high-value primary care providers.
  • Increase the use of alternative payment methods -The commonwealth wants to increase the percentage of HMO participants covered by alternative payment methods from 58.5 percent in 2015 to 80 percent this year. Savings: $23 million to $68 million.
  • Reduce the growth of prescription-drug spending – Cut the growth-rate of spending on prescriptions from 5.0 percent in 2016 to 3.6 percent to 4.3 percent. Savings: $57 million to $113 million.

Topics: Health Care Costs, Health Insurance, Health Care

Never Mind Washington; Here's How to Moderate Health Insurance Premiums

Posted by Rick Lord on Mar 12, 2017 3:09:56 PM

You’ll excuse Massachusetts employers for being cynical as they watch the health-care debate in Washington unfold while they struggle to manage the crushing financial burden of providing good medical insurance to their employees.

health_care.jpgThe truth is that federal health-care reform, whatever its final structure, will do little to moderate the accelerating premium increases that employers and workers alike now face. Trumpcare, like Obamacare and Romneycare before it, is primarily about extending coverage rather than addressing the underlying drivers making health insurance more expensive for companies.

That’s why employers – a results driven group if ever there was one – want to know how the nation is going to solve the cost problem so that business owners don’t get knots in their stomachs every time they receive their insurance premium renewals.

The good news is that Massachusetts is beginning to identify some answers. And there appears to be enough common ground and political will on the issue to pursue some solutions.

New research conducted by the Massachusetts Health Policy Commission suggests that Massachusetts employers, insurers and policymakers could reduce total health-care expenditures anywhere from $279 million per year to $794 million per year, or 0.5 to 1.3 percent, by making seven improvements to the health-care system.

The improvements:

  • Shift community appropriate care to community hospitals – Reduce by 5-10 percent the number of cases treated at teaching hospitals that would be more appropriately treated at community hospitals. Savings: $43 million to $86 million.
  • Reduce hospital readmissions – Cut the 2015 hospital readmission rate from 15.8 percent (78,000 readmissions) to a range of 15 to 13 percent. Savings: $61 million to $245 million.
  • Reduce avoidable emergency room visits – More than 900,000 emergency room visits during 2015 were considered avoidable. Shift 5-10 percent of those avoidable visits to lower-cost settings. Savings: $12 million to $24 million.
  • Reduce use of institutional post-acute care – Redirect 5-21 percent of the patients who currently leave hospitals to go to institutional rehabilitation facilities into home care. Savings: $46.6 million to $186 million.
  • Provide incentives for consumers to choose high-value primary care providers.
  • Increase the use of alternative payment methods -The commonwealth wants to increase the percentage of HMO participants covered by alternative payment methods from 58.5 percent in 2015 to 80 percent this year. Savings: $23 million to $68 million.
  • Reduce the growth of prescription-drug spending – Cut the growth-rate of spending on prescriptions from 5.0 percent in 2016 to 3.6 percent to 4.3 percent. Savings: $57 million to $113 million.

The Health Policy Commission is considering one major proposal that would encourage these improvements. The proposal would tighten the state’s benchmark for health-care spending growth from 3.6 percent to 3.1 percent annually. AIM supports the measure.

The spending growth benchmark, established as part of the health-cost control law of 2012, is a critical component for understanding year-over-year increases in health- care spending. AIM has always favored an aggressive goal – the organization joined with the Greater Boston Interfaith Organization in 2012 to support setting the health-care cost growth benchmark at two percentage points below the growth in the state’s economy.

The association ultimately supported the establishment of a 3.6 percent benchmark because we recognized the vital importance of creating a standard to measure cost-containment efforts.

But we have not yet seen sufficient progress. Massachusetts has exceeded the 3.6 percent benchmark in two of the past three 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 unsustainable cost increases are occurring in an industry where experts agree that at least a 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.

AIM remains committed to pursuing the seven solutions outlined by the Health Policy Commission as a method of addressing the health-insurance premium crisis facing employers. It’s an approach that is sure to pay more immediate dividends than anything that will come out of Washington.

 

Topics: Health Care Reform, Health Care Costs, Health Insurance

Health Reform Repeal and Replace - What Does It Mean to Employers?

Posted by Russ Sullivan on Mar 7, 2017 11:33:38 AM

Republican members of the U.S. House of Representatives yesterday released their long-awaited alternative to the Affordable Care Act (ACA).  The proposed law retains some of the more popular features of the ACA while modifying or outright repealing others.

Health.Energy.jpgWhat would the proposal mean for employers in Massachusetts? Here is a quick, initial review of key provisions:

Employer-Provided Health Insurance:

  • Eliminates the employer mandate retroactive to December 31, 2015.
  • Eliminates taxes on prescription drugs, over-the-counter medications, health-insurance premiums, and medical devices.

Employer-Provided Health Insurance and the Individual Health Insurance Market

  • Retains ACA provision allowing parents to retain dependents on their plan until they are 26. 
  • Health Savings Accounts - Allows individuals to contribute at the current family amount and allows families to contribute at twice the current family amount

Individual insurance market

  • Eliminates the individual mandate retroactive to December 31, 2015. 
  • Retains ACA prohibitions on pre-existing conditions, but effective in 2019 imposes a 12- month surcharge equal to 30 percent of the premium for enrollees in individual market who had a 63-day or more lapse of coverage in prior 12 months.
  • Effective January 1, 2020, repeals cost-sharing subsidies, currently available to individuals with incomes from 100 percent to 250 percent of the federal poverty level (FPL) to assist with out-of-pocket expenses
  • Effective January 1, 2020, eliminates the Premium Tax Credit for individuals purchasing health insurance in state exchanges, replacing that credit with tax credits for qualified plans on individual market.
  • Repeal of plan tiers based on actuarial value.
  • Increase age ratio for plan costing from 3:1 to 5:1, allowing aged-based cost variations to differ by as much as five times based on enrollee’s age.

Tax credits for Qualified Plans on the Individual Market

  • Annual credits begin at $2,000 for 20 year olds, and increase by $500 per decade, capping at $4,000 for people in their 60s; reduced by 10 percent of modified adjusted gross income (MAGI) over $75,000 ($150,000 for joint filers); reduced by amount received under a small-employer health reimbursement plan; penalties on erroneous filers.
  • Effective January 1, 2020 payments may be made in advance and on behalf of eligible individuals directly to health plan provider.
  • Applies to plans on individual health insurance market and COBRA.
  • Qualified plans do not include those that cover abortion, except in case of rape, incest or when mother’s life is threatened.

The bill also establishes a Patient and State Stability Fund, which provides states with $100 billion over nine years to design programs promote participation and stabilize risks in the individual health insurance market.

That provision has a down side for Massachusetts -15 percent of the funds are available only to states that either experienced an increase in the uninsured population from 2013-2015 among people below the poverty level; or to states that have fewer than three health insurance plans available on their state exchange in 2017.  Massachusetts would forfeit 15 percent of the available funds for not meeting either of these requirements.

There are also provisions that would roll back the expansion of Medicaid, the federal health insurance program for low-income people, and change the manner in which Medicaid funds are allocated to states:

  • Effective January 1, 2020, repeals Medicaid eligibility expansion from individuals with incomes at or below 138 percent of federal poverty level; and to children, pregnant women, and breast cancer and cervical cancer patients with incomes at or below poverty level.
  • Effective January 1, 2020, changes state funding from claims-based allocations to “per capita” allocations, potentially reducing funding to eligible recipients in Massachusetts.
  • Eliminates ACA requirement that Medicaid provide “essential health benefits.”
  • Requires state to verify Medicaid eligibility every six months.

Expect animated discussion and debate on both the federal and state level as advocates and opponents dig into the details over the coming weeks.

Topics: Health Care Reform, Health Care Costs, Health Insurance

Employers: Federal Health Reform Must Change

Posted by Katie Holahan on Feb 8, 2017 10:00:00 AM

Massachusetts employers believe overwhelmingly that federal health-care reform must change, but their opinions about how to do so vary widely.

Health_Care_Reform.jpgA new AIM survey finds that 43 percent of Bay State employers think that Congress and President Donald Trump should make changes to the existing Affordable Care Act, or Obamacare. Forty percent favor repealing the law and replacing it with an alternative program.

Eleven percent want to leave the current system in place while seven percent would repeal the reform law without an alternative.

The president and the Republican-controlled Congress have made “repeal and replace” a centerpiece of their governing priorities for the first 100 days. Republicans have yet to agree upon an alternative, but appear to favor eliminating the tax penalties imposed on people who go without insurance and on larger employers who do not offer coverage to employees.

The AIM survey was taken in January and is based upon responses from 162 employers from all sectors of the Massachusetts economy.

“The paperwork for Obamacare is ridiculous and terrifying for the regular person,” wrote one employer.

“We used to get one bill and now you get a bill from each doctor and have to wait for explanation of benefits and pre-register for everything. They have made health care so many layers it's no wonder the prices are through the roof.”

Another employer echoed that frustration.

“Trying to make changes to a 2,700-page bill with over 40,000 pages of accompanying regulations is bizarre. Start over,” the employer wrote.

Richard C. Lord, President and Chief Executive Officer of AIM, said employers supported the 2006 Massachusetts health-care reform as a first step to controlling the cost of providing health insurance to workers. Federal reform caused upheaval for many small employers in Massachusetts, but Lord also warns that an ill-considered repeal might put at risk billions of dollars in federal Medicaid funding that made the Bay State reform so successful.

“The expansion of Medicaid is exerting significant financial pressure on the state budget. Our hope is that policymakers in Washington can agree on some common-sense tweaks to Obamacare that would work to everyone’s benefit.”

Republican leaders formulating a replacement health reform have talked about eliminating tens of billions of dollars provided each year to states that have expanded eligibility for Medicaid. They have also discussed repealing subsidies for private health insurance coverage obtained through the public marketplaces known as exchanges.

The 2010 federal reform imposed taxes and fees on certain high-income people and on health insurers and manufacturers of brand-name prescription drugs and medical devices, among others. Republicans have not said for sure which taxes they will scrap and which they may keep.

The policy debate in playing out amid growing signs of accelerating health-insurance premium costs.

“My insurance premiums increased 24 percent this year. That is a little excessive,” one employer wrote.

Topics: Health Care Reform, Health Care Costs, Health Insurance

Proposed Assessment Will Hurt Employers Who Provide Health Insurance

Posted by Rick Lord on Jan 26, 2017 3:00:40 PM

Governor Charlie Baker yesterday described his proposal for a $300 million health assessment on employers as an attempt “to wrestle with the fact that a huge portion of people who are working full-time are either not taking coverage that's available through their employer and going on MassHealth, or are working for people who aren't offering them coverage at all, and going on MassHealth."

health_care.jpgHe added, according to State House News Service, that “the centerpiece of this budget really is a smart and common-sense approach to address the problem of costs being shifted from private sector employers for their employees onto state government."

Set aside for the moment the questionable premise of rampant cost shifting in a commonwealth where 76 percent of employers offer health insurance compared to 55 percent in the rest of the country.

The important point is that the governor’s sweeping proposal goes far beyond targeting employers who offer no health insurance, and instead penalizes employers who already offer high-quality insurance coverage to their employees.

It appears that money, not fairness, is driving the new fair-share assessment.

The administration plan would impose 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, 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.

The employer assessment, which would bring an estimated $300 million into state coffers, represents a revival of the so-called fair share contribution plan that was a linchpin of the 2006 universal health care law in Massachusetts before it was repealed to make way for the federal Affordable Care Act. The state employer mandate was repealed in 2013 as lawmakers and former Gov. Deval Patrick worked to bring Massachusetts into compliance with federal health-care reform.

AIM asked multiple employers of varying sizes to determine whether they would be subject to an assessment under the governor’s plan. Every one of the companies, from small manufacturers to international financial institutions to corner retailers, reported that they would face assessments. Most fell short of the 80 percent threshold because of employees using spousal health plans or because of the calculation of full-time equivalent employees.

“There is widespread concern among responsible employers that they are being dragged into an assessment intended for companies that provide no health coverage,” said Katie Holahan, Vice President of Government Affairs at AIM.

Holahan said AIM has developed an online calculator that will allow employers to determine how much they might owe under the governor’s proposal.

AIM opposes the employer assessment because the growing shortfall at Masshealth, which provides health insurance to 1.9 million low-income Massachusetts residents, is attributable solely to problems arising from the federal Affordable Care Act (ACA), a law that may well be repealed by the time Massachusetts solves its Medicaid problems. 

ACA made access to health insurance an entitlement based on expanded income eligibility.  Under the Massachusetts health care reform law of 2006, employees who were offered employer-sponsored health insurance were ineligible for MassHealth.  The ACA reversed that policy and allowed employees to decline employer coverage and still 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.  ACA made it an economically rational choice for eligible residents.

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 the state economy.  This challenging moment underscores the fact that policymakers have concentrated too heavily on access issues instead of controlling the cost of health insurance, and now face a renewed imperative to lower costs for everyone in Massachusetts.

AIM looks forward to working with the administration and the Legislature to find a fair solution to the commonwealth’s challenging health-care financing issues.

Topics: Health Care Costs, Health Insurance, Charlie Baker

Infographic: The Governor's Proposed Health Assessment

Posted by Katie Holahan on Jan 25, 2017 4:21:34 PM

The Baker Administration filed a budget proposal today that, as expected, would impose a $2,000-per-employee tax on some employers to close a deficit in MassHealth. AIM opposes the assessment as unfairly burdening employers for a problem they did not create.

Which employers will be subject to the assessment? Here is an infographic that summarizes the administration proposal. AIM is developing a calculator that will allow employers to determine exactly what their costs will be under the new assessment.

If you have any feedback or questions about this proposal, please contact Katie Holahan at [email protected] or 617.262.1180.

Fair Share 2017.jpg

 

Topics: Health Care Costs, Health Insurance, Charlie Baker

Subscribe to our blog

Posts by popularity

Browse by Tag