Today’s lead Globe story and lead editorial deal with Governor Patrick’s proposal to increase shared responsibility assessments to fund a shortfall for MassHealth and Commonwealth Care for this fiscal year (also recommended, the Globe’s B-1 article on the children’s mental health bill, to be passed by the Senate today).
The business associations are raising the loudest objections, saying Patrick’s proposal to change the fair share formula would upset the delicate balance that allowed the business community to support initial passage of chapter 58.
Chapter 58 set a standard for the the Division of Health Care Finance and Policy to use in deciding which firms ought to make the token $295 annual fair share contribution to help pay for health reform. Firms which don’t make a “fair and reasonable” contribution to their employees’ coverage would be required to pay the assessment. The Romney administration defined “fair and reasonable” in a particularly anemic way. Companies would be expected only to either cover 25% of their full time workers, or if, that standard isn’t met, at least offer to pay a third of the premium for those workers. That’s all.
And what’s the big Patrick reform that’s scaring all the business leaders: changing the “or” in the regulation to “and.”
The Globe story implies that 25% or 33% standard was part of the crucial compromise that allowed health reform to pass with the support of employer interests.
We think that’s revisionist history. Let’s go to the primary sources. Here’s Health Care Finance co-chair Senator Moore (source):
“my recollection of the Legislature’s discussions on defining a “fair share employer” was that employers would be expected to contribute at least fifty percent of the premium cost.”
And here’s his co-chair, Representative Walrath (source):
1… Since the intent of the legislature was that employers not only offer but contribute to employee health plans, it seems counter-intuitive to use employee participation as a primary test. I suggest that the two requirements be combined, and that employers be required, first, to contribute to the cost of the plan and then to meet enrollment targets. I believe such an arrangement would more closely reflect the letter and spirit of section 47 of Chapter 58.
2. As well as constituting a primary test, the contribution required of employers ought to be higher than 33% of the premium cost of an individual plan. Since the current statewide median employer contributions to health care premium costs exceeds 70%, it seems more than reasonable to set the required percent at 50% of the premium cost.
The crucial compromise included a broad estimate as to how much revenue would be contributed by employers to fund health reform. When the original chapter 58 deal was struck, employers understood that the fair share assessment was expected to raise around $103 million in the first three years (source). But under the Romney regulations, the three-year total is under $15 million. It’s the current regulations that go against the original deal.
The fact is, Governor Patrick is proposing only that employers offering no or little health coverage to their workers support the program as originally intended. His plan would increase the total amount collected to $38 million a year. Health reform has brought a huge advantage to these employers, as their workers are now eligible for state health benefits. In fairness, these employers ought to make at least a modest contribution to the cost of their worker’s care.