Massachusetts Gov. Patrick Proposes Requiring Businesses, Insurers, Hospitals To Contribute More to State’s Health Insurance Law

Massachusetts Gov. Deval Patrick (D) on Sunday proposed raising about $100 million through additional employer, insurer and hospital contributions to close a funding gap in the state's health insurance law, the Boston Globe reports. The proposal would raise about $33 million by requiring employers with more than 10 workers to contribute at least one-third of workers' premiums within their first 90 days of employment and by requiring that at least 25% of their workers are enrolled in an employer-sponsored insurance plan. Businesses currently are required to meet either one or the other of the two conditions. Under the proposal, employers who fail to meet both conditions would be subject to an annual penalty of $295 per worker.

An additional $33 million would be raised by assessing fees on insurers' reserve accounts, which the companies say are needed in case of a public health emergency, such as a terrorist attack or influenza pandemic. Hospitals would be required to contribute an additional $28 million under Patrick's plan. Patrick also has proposed using $35 million from the Medical Security Trust Fund, which is used to pay for health insurance for low-income individuals.

The Globe reports that the proposal is "threatening to fracture the fragile coalition whose support was instrumental in passing" the health insurance law. Consumer advocates have voiced support for the plan, but businesses oppose it. Rick Lord, president and CEO of Associated Industries of Massachusetts, said, "It was a real delicate balance that was achieved two years ago to bring everyone on board," adding, "This jeopardizes the support of the business community, and that's one of the reasons reform has been so successful so far." Lord said, "Any reform that has been tried anywhere else -- when the business community opposed it, reform has not been successful." Hospitals in the state say they are willing to support the plan as long as the state, in an unrelated bill, does not impose minimum nurse staffing requirements, according to Lynn Nicholas, CEO of the Massachusetts Hospital Association.

Poll
A Harvard School of Public Health and Blue Cross and Blue Shield of Massachusetts poll being released on Tuesday found that nearly three-fourths of state residents support requiring businesses with more than 10 workers to contribute more to the system, and 61% support requiring insurers to contribute more to a fund that would provide coverage subsidies. For the study, led by Harvard public health and political analysis professor Robert Blendon, researchers polled 1,015 state residents from June 10-23 (Lazar [1], Boston Globe, 7/15).

The survey also found that 69% of state residents support the health insurance law, compared with 61% who supported it when it was enacted two years ago. However, when the same question was asked only of people who bought health insurance or changed policies because of the law, the portion supporting the law changed to 52%. In addition, 33% felt that the uninsured were being hurt by the law, compared with 17% last year. Seventy percent said they support the continuation of the law.

Blendon said, "They are basically saying it's better to have people covered, even though there are problems here. People are aware there are costs to this thing, yet they still hang in because they think it's the right thing to do" (Lazar [2], Boston Globe, 7/15).

Editorial
"The good news" about the Massachusetts health insurance law is that enrollment has
"greatly exceeded projections"; however, the "bad news" is that the higher-than-expected enrollment has raised the cost of the program from an expected $472 million to $630 million, a Globe editorial states. According to the editorial, state "legislators should quickly find a way to pay for Commonwealth Care's success without gutting other state programs or putting an undue burden on the newly insured," adding that the "Patrick plan to achieve this is a good start." According to the editorial, the proposal "spreads the pain relatively equally among health reform's major stakeholders, from providers to employers to insurers and the state itself."

The editorial continues, "If lawmakers do not act, the alternatives are sobering," including reduced spending for other programs, further increased charges to subscribers or capping enrollment. This "would not only leave consumers without access to affordable coverage, it would also probably make it impossible for the state to enforce the mandate on individuals to get insurance," the editorial states (Boston Globe, 7/15).