July 18, 2008
President’s Update on Health Care
Dear Chamber Member,
Earlier this week, the Patrick Administration filed a 2008 Supplemental Budget Bill in the state House of Representatives which included new charges aimed at addressing possible financing gaps in the state's health care reform law.
The administration's proposal would subject more employers to the Fair Share assessment, establish a mechanism which could increase that assessment above the current $295 per worker per year, place new charges on hospitals and health insurance companies, and draw money from the Medical Security Trust Fund It is projected to generate $130 million in the next fiscal year which would be matched by federal dollars.
It is important to look at these proposals in the current economic context. Our economy, at both the state and national level, is stagnant. We need to support and promote employers like you as you work to create jobs. Increasing the cost burden on employers in this economic climate would further harm the region's economy and make it more difficult to do business in
Massachusetts
.
The Chamber continues to be a strong supporter of health care reform. While it is important to ensure that health care reform is fully funded, it is equally important to do so in ways which do not harm the Commonwealth's competitiveness. Some elements of the administration's proposal carry that risk. In addition, raising the fair share assessment above $295 would contradict the agreement that was at the heart of the original health care reform law.
Through a series of in-person meetings and phone conversations this week, the Chamber has been actively conveying our message to leaders in the administration and the Legislature. We will continue to work with state government and business leaders on this issue in the days ahead.
For your review, I have summarized the Governor's proposal below.
· Increasing the Employer Fair Share Contribution. This section seeks to make a permanent change to the Employer $295 Fair Share Assessment. If annual Employer Fair Share Contributions are less than $38 million, the $295 assessment would increase by an amount sufficient to make it $38 million in the following year. If annual contributions are
more than $38 million, an adjustment would be made downward. Achieving that threshold will require a change to the existing standards employers must adhere to in order to avoid the $295 assessment. The Governor's proposal requires that employers meet both tests - 25% employee take-up rate; 33% employer premium contribution minimum - instead of one or the other as set forth in the current law, in order to avoid the Fair Share Assessment. The current law also prevents the Employer Fair
Share Assessment from exceeding $295;
· Assessments on Health Insurance Companies and Health Care Providers. This section seeks to impose a one-time, $33 million assessment on excess insurer funds held in reserve; and a one time, $20 million increase in the Health Safety Net Trust Fund assessment by health care providers;
· Drawing from State Resources. This section seeks to authorize a one-time transfer of up to $35 million in surplus funds currently contained in the state's Medical Security Trust Fund to go towards funding Commonwealth Care and MassHealth needs. Fifteen million dollars would be transferred immediately, and additional transfers would be authorized only if sufficient
balances remain in the Trust Fund to help fund health insurance for those receiving unemployment insurance benefits.
If you have any questions regarding this information, please do not hesitate to contact myself or Jim Klocke, executive vice president in charge of public policy (jklocke@bostonchamber.com).
Sincerely,
Paul Guzzi
President & CEO