Jon Hurst, President of the Retailers Association of Massachusetts, says the state should step in to stop the steep health insurance rate hikes that small businesses face in 2010:

This past year has been filled with discussions here in the Commonwealth about cost control, cost containment, payment reform, rate regulation, rate hearings and the list goes on. Many have worked and continue to work arduously to address the issue of cost in the health care delivery system.

The Special Commission on the Health Care Payment System has completed its work and issued its recommendations, with legislation implementing those recommendations likely coming in 2010. The Health Care Quality and Cost Council has issued its Roadmap to Cost Containment, highlighting the path ahead. The Division of Insurance (DOI) is in the middle of a lengthy series of hearings around small group premiums and a separate series of sessions on the potential of creating marketplace competition through group purchasing cooperatives. I applaud the work around all of these initiatives and hope the process on each continues to move forward. But for small businesses across the state, I fear that none of this will be enough to save them in 2010.

As reported last month in the Boston Globe article, “Small businesses bridle at health insurance hikes,” small employers are already getting early looks into their holiday stockings and are seeing that the insurers are filling them with coal. Premium renewals have begun to arrive and of course the double digit increases are again rolling in, but something seems to be different this time around – the rates seem grossly higher.

The Globe article and early feedback from our members show staggering and unaffordable increases for small businesses and their employees:

47%. 35%. 30%. 39%.

Does Fidelity see these same percentage increases? Does Raytheon? Does the GIC? Are the insurers seeking to lock in another year of big increases before reforms can be implemented creating new competition and regulation? Read more…

Jon Hurst, President of the Retailers Association of Massachusetts, says lawmakers currently negotiating a national health care overhaul should learn from the Bay State and not penalize employers in the rush toward reform:

The parallels of the debate in Washington on health care reform and what we have experienced in Massachusetts over the past three years are uncanny. Many of the models replicate the Massachusetts experience, and armies of public relations executives have been working around the clock to convince everyone that our reform is either the best public policy initiative ever conceived, or the absolute worse. No matter where you come down on that position, most common sense observers can agree that the haste in which both were pushed or are currently being pushed could be too aggressive, opening doors not only for costly mistakes but also inadequate solutions.

The 2006 Massachusetts Health Care Reform was very much driven by both the potential for losing a pending federal Medicaid waiver, as well as to prevent a proposed payroll tax ballot initiative. The employer community was primarily playing defense, focused on preventing uncompetitive taxation and unaffordable mandates. That left a gaping hole for both health care expansion advocates and big health care providers to primarily play only offense in seeking policies which may have been prevented under a more thoughtful process.

The reform merged the non-group and small group marketplaces, resulting in relief for individuals at the expense of small businesses and their employees. The annual double digit increases for small businesses and their employees have continued even during these times of economic contraction. The promise of the Connector never materialized for small businesses due to the lack of negotiating ability for non-taxpayer subsidized plans.

Likewise, the continued legal and small group marketplace discrimination against small employers imposed a decade earlier by the prohibition of group purchasing exists to this very day.

And taxes now being placed upon employers due to complicated triggers create the puzzling and counterproductive reality that even those who offer health insurance may be liable for costly assessments. Read more…

With the recent passage of the FY10 state budget, small employers once again find themselves unfairly and inequitably charged with carrying additional assessments in the costs of their health insurance to the tune of an additional $52 million.

This new assessment comes to us by way of the state’s Universal Vaccine Program (4580-1000) which, new in FY10, will now be funded by a $52 million tax on “health insurance carriers, as defined by Chapter 176O.”

Now, the universal immunization program, which provides for the purchase of vaccines for all children in Massachusetts, certainly is a worthwhile and needed program – a program that serves the Commonwealth as a whole and should be supported by the Commonwealth as a whole and thus funded out of the General Fund or, at a minimum, be funded by all health care payers.

However, the language in the budget, referenced above, changes the funding mechanism to assess only those carriers as defined by Chapter 176O to pay for this program. This language ensures that the assessment falls squarely on small-and medium-sized businesses, which purchase health insurance coverage through health insurance carriers defined by Chapter 176O. Left out are the large companies and many Taft-Hartley union accounts, which typically self-insure. Read more…

Regular readers of the WBUR Commonhealth blog know that I have complained long and loud for years now that the clear shortcoming of health care reform in Massachusetts has been the lack of equal rights, opportunities, and insurance pricing under the law and in competitive markets for small employers versus what exists for the big business and big government. We remarkably have a health care mandate law pushed for by the receivers of our health care dollars—such as Blue Cross/Blue Shield of Massachusetts and Partners–which requires coverage, yet which does not allow small businesses and small non-profits the same ability to group buy or to seek discounts from providers that large purchasers enjoy. Without that ability, insurers are free to take money from the small purchasers in order to give all the discounts to their big groups. Kay Lazar of the Boston Globe examined this issue very recently.

We all know about the hundreds of millions of dollars cities and towns would save by joining in on the buying clout of the Group Insurance Commission. The GIC has been very effective in keeping their recent increases in the 3-5% range. Read more…

The Group Insurance Commission recently announced that their plan increases will once again be held to low single digits this year—about 3%. The Connector announced that rates for their subsidized plans won’t rise at all this year. All this is good news for taxpayers and premiums payers fortunate enough to buy under those plans, but what about small businesses? We understand that the average increase this year for small businesses is once again in the double digit range—about 14%.

Can somebody—the insurers, the regulators, anybody please explain what in the world is going on here? In this environment of mandated health insurance coverage; in this environment of a terrible economy with small businesses and small non-profits struggling to keep their doors open, this continued premium disparity situation is a borderline scandal.

And although some good state regulatory activity is expected to occur beginning this fall, can we really anticipate that small businesses and their employees will see any relief from that activity before spring of 2011? Read more…

There are a lot of good things beginning to happen on health care reform, including the first steps on hospital cost and quality transparency; more movement to save taxpayers hundreds of millions of dollars by having municipalities purchase through the GIC; and finally more media focus on the cost side of the equation as exhibited by the important Globe Spotlight team reports.

It is encouraging that public acknowledgement is growing about the need to fix the cost side of health care in order to save the access side. Yet, although I am pleased with the growing attention health care costs are beginning to get, I remain frustrated that the equally important issue of cost apportionment among payers and consumers remains ignored. Health care providers have long complained that government payers—Medicare and Medicaid—do not adequately reimburse the true costs for procedures, creating cross subsidization from private insurance subscribers. True enough. But what about cross subsidies within the ranks of private payers?

Some questions to ponder: If it is true that the GIC is saving the state and now municipalities hundreds of millions of dollars through their group buying efforts, isn’t it also possible that other payers are picking up the tab for those savings? If it is true that the Connector will be holding the line on rate increases at 2% for their Commonwealth Care plans (taxpayer subsidized), isn’t it possible that others will be paying more in order keep those increases in check? Read more…

These are scary times, and it has nothing to do with our struggling sports teams. Consumers and employers alike have taken a beating over the last year, from declining home values, rising energy and food prices, to the recent crashing of our 401(k)’s. Recoveries on all three economic factors are encouraging, yet tenuous at best. Let’s all hope recoveries occur and that the most disruptive economic decline does not happen—job loss.

Yet despite the economic uncertainty, we are on the cusp of further mandated state health care costs and penalties which could make a difficult situation even worse. The possible imposition of a more restrictive Minimum Credible Coverage (MCC) standard at this time is one decision that may significantly delay any hopeful recovery for our families, our employers and our economy. Increased tax penalties on families struggling to decide whether or not they can afford to purchase health insurance may also be ill timed in a recession, and at a time that big health care continues to hammer all of us with double digit premium increases.

Quick, somebody call a time out! Before we go any further, let’s step back and look at our current situation. We do not want to make bad decisions now which will hurt our residents economically and imperil our important health care reform in this state!

The Connector’s Board of Directors faces a vote later this week at which they may decide to unilaterally increase the health insurance costs for hundreds of thousands of Massachusetts residents. Read more…

Two years into the Massachusetts health insurance mandate law and we find ourselves with a great success story on access and coverage. The law has delivered in expanding coverage and that is a very good thing. Yet, small businesses are increasingly frustrated on the long wait for relief from the never ending annual premium increases. Unfortunately their frustration is just about to boil over, first into outrage and then to surrender over two simple words—“OR” and “AND.”

Family health insurance policies for those at the bottom of the purchasing food chain are as much as $23,000 today. For small businesses, those rates are unaffordable and they have not yet seen steps to reverse the trend. What they have seen are unnecessary and unaffordable teaching hospital expansions, with recent regulatory activity to curb these new facilities coming several years too late. They are too well aware that they pay far more for the same coverage than do big purchasers, thus creating a disproportionate funding of the health care system by small businesses than by large companies or by government payers. They see group purchasing discounts for public employers, while the law actually prohibits such opportunities for them. And unfortunately the Connector still hasn’t delivered on the promise of low cost small business plans for them, focusing to date only on taxpayer subsidized plans. Read more…

The DHCFP employer report came out on Friday and already advocates that have never had to make a payroll, never had to keep a business open, never had to compete with businesses in border states and on the Internet, are saying businesses are not paying their fair share under the first in the nation mandated health insurance law. This report requires deeper understanding than just looking for the names of big firms that are supposedly “free riders.” Employers–particularly small businesses–are struggling with an awful economy, and they are dealing with state mandates that not only do not exist in any border state–they don’t exist in any state in the union. And yes, small employers do indeed include those with over 50 employees.

Right now in Massachusetts we are on the cusp of an economic downturn not seen since 1990. We are in danger of job losses that will hurt our families by putting people in unemployment lines which disproportionately will hurt the least fortunate among us. Yet, some are beginning to point fingers at some of the very communities which are desperately needed by our most struggling families for jobs and income. Read more…

It is April 1, and consumers across the Commonwealth have reason to rejoice! Today is the day new competition and double digit premium reductions enter into the state health insurance marketplace. This is indeed a grand day—one that will benefit all consumers, all employers, and all taxpayers. Today, the health care industry—a for-profit industry that has been previously heavily regulated—forgoes the modest reductions or modest increases we have seen in recent years, and grants us the impressive decreases we all deserve.

This consumer benefit has been a long time coming. In any industry you must have either competition or regulation to protect the consumer. To be fair, health insurance and health care providers have been strictly regulated for decades, keeping our increases in the low single digits in most years, and granting us rate reductions in other years. This has worked relatively well for consumers, yet now allowing for more rate setting flexibility like what occurs in other states is bringing in new insurers and new competition, and forcing dramatic rate reductions for most of us.

In my own experience, I am moving to a new health insurer this month that will save me about $800 per year. Read more…