Federal Health Care Reform Needs Surgery
Lord
Seven years ago, Associated Industries of Massachusetts (AIM) and its 5,000 member employers supported the groundbreaking health reform effort in Massachusetts, a necessary step toward repairing a health-care system that had been choking the life out of our economy for decades.
We undertook an exhaustive effort to ensure that every Massachusetts employer understood its shared responsibilities under an enormously complex law.
The Massachusetts reform initially experienced many of the same challenges we're now seeing with the federal Affordable Care Act (ACA). But Massachusetts ultimately persevered and accomplished much of what the ACA is now asking the other 49 states to do. For instance, the percentage of Bay State residents without health insurance has dropped from 8 percent to a best-in-the-nation 2 percent today. Employers have stepped up as well, with 77 percent offering health insurance to employees, versus 70 percent in 2005.
So, it's discouraging to see that key provisions of the ACA that were supposed to dovetail with the Massachusetts law instead threaten to accelerate the already burdensome cost of health insurance for employers, citizens and a state that spends nearly half its budget on health care. For example:
• A third-party analysis conducted for the state estimates that a health-care premium tax included in the ACA will cost Massachusetts employers and consumers $213 million in 2014 and $3 billion during the next decade.
• A provision reducing rating factors that are used in the combined individual/small business market could increase premiums for 60 percent of small companies, according to a Pioneer Institute analysis of state data.
• ACA will shift employers with between 51 and 100 employees into the merged health insurance market in 2016, resulting in a small decrease in premiums for employers with up to 50 employees but an increase of up to 9 percent for employers with 51 to 100 employees.
• ACA rules require states like Massachusetts that merged their individual and small-group health insurance markets to set rates only once a year instead of the current quarterly time frame that has allowed Massachusetts employers and consumers to benefit from more frequent rate declines.
• A 2.3-percent tax on medical devices that took effect Jan. 1 will cost one of the commonwealth's fastest growing industries $411 million a year, according to the Pioneer Institute.
So, in short, it's time to fix federal health care reform. Why does Massachusetts stand to be penalized for having successfully figured it out? It's like the one good kid in the class getting detention when everyone else is talking.
AIM's concerns about ACA are practical, not political. And they don't diminish our support for the mission of state and federal health reform to make health insurance more affordable and accessible.
The ongoing national partisan maelstrom makes solving employer concerns about ACA challenging at best. With no legislative fix on the horizon, the only workable solution is a waiver or regulatory flexibility from certain provisions to allow Massachusetts to maintain its current reform structure. The U.S. Department of Health and Human Services should grant Massachusetts a permanent waiver from the ACA provisions that threaten to undo the laudable progress the commonwealth has made to control health costs..
If there is no waiver, the law must be amended to exempt Massachusetts. That will help the Affordable Care Act live up to its name.
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Richard C. Lord is president of Associated Industries of Massachusetts. Contact him at rlord@aimnet.org.
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