Here’s the ACT!! testimony for the Friday morning hearing on adjusting the “fair and reasonable” definition for the employer fair share assessment. Please join us, 10:00 a.m., One Ashburton Place, 21st floor.
And here’s today’s Globe editorial:
Keep this experiment going
BECAUSE of the state’s bold experiment in broadening health coverage, Massachusetts now has the highest rate of insured residents in the country - 94.6 percent, according to recent census data. But the cost of progress has risen, as more and more of the uninsured sign up for the state’s subsidized Commonwealth Care plan. Once estimated at $472 million in its first year, the bill came in at $630 million.
Even so, Massachusetts must keep this experiment going. Today, a state agency will hold a hearing on a sensible proposal by the Patrick administration to close the gap - it wants to collect from more businesses that are not doing a good job of providing insurance for their employees.
Under the plan’s original design, a firm with 11 employees or more would have to pay the state a modest $295 a year for each uninsured worker if the company does not insure 25 percent of its full-time employees or provide 33 percent of its workers’ premiums. The Patrick administration wants to change that so that companies can escape the $295 fee only if they insure 25 percent of their workforce and provide 33 percent of premiums.
With this tougher standard, it is estimated that revenue from the penalty fee will jump from $7.4 million this year to more than $40 million.
Employers are not the only stakeholders in the healthcare reform plan who will have to give more than first expected under the administration’s adjustments. In April, those insured by Commonwealth Care had to swallow a 10 percent increase in premiums, and higher copays as well. The Legislature has increased the assessment on hospitals by $20 million, and took $38 million from insurance companies with excess reserves. The state itself is also kicking in $35 million from a health fund for the unemployed that is running a surplus.
All of this will ensure that the state does not have to close off enrollment in Commonwealth Care, a step that would strike at the heart of the landmark Massachusetts law. The plan has broken new ground by mandating that individuals must get insurance in one way or another. Results are so encouraging that it recently won praise even from Mitt Romney, who helped design it when he was governor but has blown hot and cold over it since.
But it would be impossible for the state to mandate insurance if it could not provide subsidized coverage to all who are eligible. Collecting from more businesses that are not doing enough to provide coverage to their workers is a good way to keep the state’s promise of universal coverage alive.
ONE MORE THING: Also check out Senator Richard Moore’s post in today’s CommonHealth Blog. To Senator Moore, one of the key architects of chapter 58, “it seems unfair to the ninety percent or so of employers in our Commonwealth who have been providing health insurance for their employees to let a small percentage coast along not paying their fair share.” He concludes, “These new regulations anticipate an influx of $33 million dollars in revenue, which would bring us much closer to what we had originally calculated into the equation as far as shared employer responsibility. The low-income recipients of CommCare have been asked to pay more, and so have hospitals and health plans. It is crucial that all stakeholders contribute equally in order to ensure the continued success of Health Care Reform.”
September 5th, 2008 at 9:19 am
“Collecting from more businesses that are not doing enough to provide coverage to their workers is a good way to keep the state’s promise of universal coverage alive.”
Maybe more businesses could provide coverage if it were affordable. Most small businesses that I know (some that I’ve worked for) contribute 50% towards a single plan and nothing towards spouse or family coverage. They just can’t afford it. Last February my plan went from $346 per month to $439 per month for the same exact plan. this was a Fallon HMO and it was still BY FAR the least expensive available for comparable coverage (Blue Cross, Tufts, and Pilgrim were MUCH more expensive).
This whole “reform” is outrageous. NOTHING has been done to help lower middle income. All I can see is welfare expansion…and the greatest pet peeve of mine is the fraud that is being committed, not to mention my hard earned money providing coverage for immigrants and able bodied adults.
September 6th, 2008 at 3:14 pm
PJ,
How can you provide coverage for “able bodied adults”? Aren’t receivers of benefits considered to be disabled?
September 6th, 2008 at 11:43 pm
I wish to address two topics regarding Brian Rosman’s post and the comment by Senator Moore:
1) “. . . results are so encouraging . . .” and “. . . continued success of Health Care Reform.”
Enrollment has been more or less flat since the beginning of 2008. In fact, more people are being involuntarily disenrolled than are enrolling. The Connector likes it this way: it costs the state less and the penalties will flow in - a win-win - and, no retroactive coverage - yet another win for the infamous Connector and its friends at the insurance companies - this law is but a promise of more profit.
Unfortunately, due to media censorship, there is a dirth of information regarding the hundreds of thousands of residents who are being seriously harmed - financially, medically and with regard to their well-being.
For starters, to survive this horror, residents must intentionally lower their incomes in order to have less expensive insurance or penalties. Otherwise, they will be worse off than before, although the extra money is sorely needed to pay the out-of-control increasing costs of such basic necessities as food, heat and gas not to mention property taxes, rents or mortgages, education, etc.
This affects tax revenue in MA as well as discretionary spending which was already down due to the overall economic crisis of the nation. Also, this means that more residents will require assistance with heating and utility bills, food stamps and other gov’t programs, thereby expanding welfare in MA, both individual and corporate - meaning the health insurance companies.
According to a statewide survey conducted by outreach workers in early 2008, it was found that the premiums were unaffordable at the 2007 costs, nevermind the increases in 2008 to both the premiums and copays. The Connector and Brian Rosman refer to this as cost-sharing. Actually, this is cost-shifting and will occur again in 2009 which is just around the corner.
Also, there are very few to no doctors in many areas of MA who will see Commonwealth Care patients and/or many members can’t afford the copays so don’t seek care, thereby, reducing the quality of health. The doctor shortage is not due to the “success” of the mandated insurance; it is due to a) the shortage of doctors in MA before this law went into effect and b) low reimbursement rates, thus, docs can’t pay their overhead and/or hire more staff to accommodate the influx of “newly” insured. In fact, some who were taking Commonwealth Care patients have found they can no longer continue. These problems are only the tip of the iceberg.
A program that exploits hundreds of thousands of hard-working taxpayers cannot be considered a success. The stress this law has created for many is inhumane.
Constituents are told by their reps and senators that this honorable experiment isn’t perfect, we’re working on it. Is it honorable to use unwilling people as test subjects in an experiment that harms them? MA is playing with lives. A law with as many flaws as Chapter 58 demonstrates that the legislature has not exercised due diligence.
2) The hospitals gave more money knowing it would come back to them as reimbursements, and worse than that, they used the quid pro quo that the Patient Safety Protection Act be gutted so safe-staffing would not be mandated, thus, saving a bundle.
Businesses should consider mounting an ERISA challenge. Or, perhaps, the fear that this is a distinct possiblity is what has kept the fines for employers, thus far, less than the individual mandate.
Aside from being fiscally non-sustainable, this law raises fundamental questions of legality, ethics and fairness. It is a bully law that targets a class of people who do not have the resources to defend themselves.
September 7th, 2008 at 4:50 pm
Hi truth speaker,
Enrollment has indeed tapered off, which makes sense; as more of the eligible population enrolls, there are fewer eligible people left to find and enroll. I don’t think this demonstrates that anyone wants less enrollment. In fact, the state’s commitment to outreach and enrollment grants tells me that the legislature and administration are dedicated to enrolling eligible residents.
You seem to think that people will find ways to lower their incomes to qualify for higher insurance subsidies or to avoid penalties. Do you have evidence of this happening, or are you guessing that people will do this? I do not think it is a reasonable assumption that they will. It would be a question of how much people can “save” on insurance-related expenses compared with how much their income would need to decrease to get that savings. You could design a study to find out what people have done, but otherwise, I don’t think guesses and assumptions like this are helpful. Also, you ignore the benefits people get from having insurance, which would necessarily figure into the cost-benefit calculation.
You are right that the primary care shortage is a big deal. (It would be a big deal without chapter 58, too.) There’s an ongoing discourse on how to improve this situation, and some effort towards amelioration from the cost control bill. It sounds like you have some good insight to contribute to that conversation- thanks.
I’m perplexed by the outrage you’ve expressed around the idea of this law being an experiment. Chapter 58 was not passed in a vacuum where everyone started out in good shape. Somewhere upwards of 500,000 MA residents lacked insurance, depending on which survey you believe. Research shows that being uninsured leads to worse health outcomes and earlier mortality. If you think dealing with the various types of paperwork from this law is stressful (and it can be, which is why so many outreach groups are helping people) try not having access to anything and needing medical care! I would say that is closer to inhumane than the imposition of paperwork.
When society faces problems like having half a million residents without sufficient access to medical care, leaders should try to improve the situation, I’m sure you agree. So the legislature, administration, community advocates, providers and yes, insurance companies, tried to figure out how to make it better. ANYTHING coming out of that process would be an experiment- how could it not be? When you try to solve a public problem, you study it, analyze your options, and then TRY your best politically available option. Then you make adjustments. The flaws that demonstrate negligence to you demonstrate to me how tough a problem this is.
I’m sorry if you don’t like the uncertainty or challenges of public policy, but taking some risks is the only way I know to make positive changes.
Do you have suggestions for how the state could have covered more people while maintaining crucial federal waiver money? (That pretty much precludes single payer, even though that would probably have been better in many ways.) And what would you say to the 90% of business owners who provide health coverage to their workers- that the 10% who don’t should continue to enjoy a competitive advantage and free-ride on taxpayers?
September 8th, 2008 at 5:31 pm
ALK,
You don’t tell us much about yourself, but based upon your gushing assessment of the nightmare that is Chapter 58, I can only assume that you are either a policy wonk or an insurance functionary, since you apparently have no clue what the situation is here on the ground. Contrary to your assertion that people are not voluntarily limiting their incomes, I have seen individuals do so. Not to qualify for Commonwealth Care, but to avoid earning more than 300% of FPL, thus avoiding the fine imposed by your beloved (and fascist) individual mandate, which extorted $7.9 million from the middle class last year. Would single payer be better? Absolutely! You say it is “politically impossible”. Nothing is politically impossible assuming we elect the right politicians. Every incumbent who supported this “experiment” should consider their job at risk. They also ought to be very worried that Question 1 on the November ballot will pass, since it removes the inforcement mechanism for the mandate. Chapter 58 is a wasteful and capricious bit of social tinkering that has benefitted insurers and some large health systems at the expense of working families. I have been uninsured for the past ten years because my employer,the Commonwealth of Massachusetts, refuses to offer me coverage. To add injury to insult, I will be fined nearly $1,000 in 2009 for declining to purchase an expensive, bare bones policy that I cannot afford on the individual market. Let me ask, where do you get your health insurance? What is your contribution to premiums? What are your co-pays and deductibles? If you are not being forced to deal with the effects of this legislation your comments have little to no validity.
September 8th, 2008 at 7:58 pm
Hi Ron,
I’m actually a student at the moment, so neither a wonk, nor (ever) involved with the insurance industry. I used to be a health care outreach worker, which is why I read and comment on this blog. I think I have some sense of the situation on the ground, though of course the people I met and spoke with were only a sample of the population, and I don’t know if they could be considered fully representative of the whole. Naturally the same is true of the people you speak with, so unless you encounter a whole lot more people than I did, I think we’re in the same boat on that front.
I am totally willing to believe that some people have reduced their incomes; what I don’t know right now is whether that reduction is significant enough to impact state productivity and tax revenue. It may be, but unless there is evidence to show that, I don’t think it makes sense to assume that it is. If you’ve got evidence beyond some anecdotes, I would like to know about it- sincerely, I would.
I base my assessment of the political feasibility of single payer on the history of the situation. I know some people worked really hard in the eighties and early nineties to get it to happen in MA, and that they failed, consistently. I know that voters in CA rejected it in the early nineties by about 73%. Here’s the thing about voting out the legislators who passed ch 58: who will you replace them with? I don’t think single payer advocates can win enough seats to make that the new policy, because most people support ch 58. I know, I don’t have the stat on that last assertion; I believe someone- Robert Blendon?- did the study on support for the law, and it’s somewhere on this blog, but I wanted to respond to your post and don’t quite have time to track it down at the moment. Anyway, point is, I don’t think there’s going to be a single payer supporting majority in the statehouse.
It stinks that the state doesn’t offer you insurance, and it stinks that the affordability schedule isn’t what you would find affordable. I would not dispute your right to be ticked off and advocate for what you think would make it better. I do disagree with ad hominem attacks and assumptions that other advocates are not sincere in their efforts to make things better, even if you disagree with the compromises they make. Just because you disagree with someone doesn’t mean they are out to get you.
As for me, I am on a student plan, paying something like $900 a year for coverage at the school health center. Not a lot I can do about it; it’s the only plan I can afford by a long shot. I am embarrassed to report that I don’t know the copays yet, because, lacking a choice, I didn’t bother to check and I haven’t gone in yet. I’d be happy to let you know when I do, if you like.
September 8th, 2008 at 8:22 pm
A.L.K.,
I didn’t say enrollment has tapered off. I said it has been more or less flat since January 2008. This doesn’t mean that most eligible residents have enrolled and the outreach agencies need to grab those who have not; it means that about one-half of the uninsured population of MA remains uninsured and not necessarily because they don’t know about the law. That said, I’m sure those who did not know figured it out when the D.O.R. snatched their personal exemption and dumped it into the Connector coffers. And, you must take into consideration the fact that out of the 350,000 “newly” insured, 110,670 were rolled over from MassHealth and, thus, are not “newly” insured.
The MA Budget and Policy Center census showed 653,000 uninsured residents; the two U.S. censuses I am aware of showed 715,000 and 748,000. Approximately 5% to 7% of the delta figure is now insured which may also include residents who were eligible but are not card-carrying members and probably a few dead people when the Connector auto-enrolled residents from the UPC database.
People who earn 300% FPL or less can barely pay their basic bills, nevermind adding health insurance to the mix. These plans may look like a good deal to you, but to many, particularly those in the 200% to 300% range and higher, they are not affordable. In fact, in the high end of Commonwealth Care, enrollment is the smallest with an increase since January 2008 of about 1.5% while 16% are in the highest subsidized plan and 72% get the insurance for free. I don’t have the figures for Commonwealth Choice in front of me, but I recall that the comparison to January 1 shows these plans are not jumping off the shelves either.
As for your assumption that I seem to think that residents would intentionally lower their incomes. Beep. Wrong. You just lost the Amana freezer. I know several in my town who, for the reasons I mentioned above, have refused raises and many others here as well as in various areas of the state who have cut back on work. People talk about this problem along with the high cost of heat wondering how they are going to make it through the winter. I have heard many stories about how people are trying to survive this law. We call it “enforced poverty.” It’s oppressive. I also know several who have moved out of MA because of this law and could have had the insurance for free but weren’t interested in the estate recovery program. I know others who are still living in MA but won’t enroll because of this program.
If someone doesn’t earn enough “extra” money to cover the cost of the increased premium, they will be worse off than before that money was earned. Do the math. If someone is at the high end of Commonwealth Care and can’t afford that premium but have the opportunity to earn more money, they had better be very careful or could find themselves eligible for a Commonwealth Choice plan at 3 to 5 times the amount depending on age, location, etc. Do the math. By the way, the least expensive Commonwealth Choice plan wouldn’t save someone from medical debt short of a heart-lung transplant. People may be low-to-middle income, but that doesn’t mean they are stupid. They run their households, figure out clever ways to earn a living and, most importantly, how to survive bad times - some make it, some do not.
You also missed part b of my statement regarding the doctor shortage b/c you said this would be a problem even without Chapter 58. Please re-read what I wrote about reimbursement to these doctors. That is the important part of this grave problem.
This law was a backroom deal brought to the attention of MA taxpayers by two postcard mailings threatening them with tax penalties if they didn’t sign up for health insurance. Coercion and collusion are both crimes, and in the case of MA, government-sanctioned. Playing with people’s lives is a dangerous experiment. Low-to-middle income people who are being seriously harmed will not recover from this unscathed, but the politicians will still have their jobs, golden parachutes and health insurance. It’s easy to say that challenges of public policy and taking some risks is the only way you know to make positive changes when you aren’t the one put at risk.
I made no mention of the imposition of paperwork. As for the stress that accompanies illness when someone is uninsured: what good is health insurance if you can’t pay for a roof over your head, heat during the cold season and food on the table to feed yourself or your family? For those who are insured, how about the stress from the HMO that refuses to pay for necessary treatment or the insurance carrier that rescinds coverage and demands reimbursment for the amount it already paid - not due to fraud on the part of the consumer - but because the medical bills are too high and cutting into profits? And let’s not forget the undue stress caused the Connector because there is no retroactive coverage even when the paperwork problems is due to administrative errors. Bottomline: Having health isurance does not necessarily mean you get to benefit from it.
You must have missed the U.S. Gov’t Oversight and Reform hearing in mid-August on Health Insurance Coverage or you might better understand what health insurance companies do to policy holders to keep their profits up. It was gut-wrenching, and that’s putting it politely. The legal counsel from AHIP was particularly horrific. Scams such as the testimony that was given by the victims is one problems with health care in this country, not to mention, death by spreadsheet.
Maintaining crucial Federal Medicaid money is the excuse Romney used to get this “emergency” law passed by the legislature. There are some dots you need to connect. Follow the money. I will also add that the vast majority of MA legislators know next to nothing about this law and the implications thereof. For starters, my state senator didn’t know that the penalties were enforced as income tax evasion and refused to believe this.
As for S2526, there is nothing in that bill that stands to help residents immediately, if ever. What good is a cost-containment bill when the insurance was unaffordable for the many from the get-go and has already increased dearly? What good does it do for residents who can’t find doctors who will see them now? I was speaking with a woman yesterday at a social event who is enrolled in a Commonwealth Care plan and can’t find a doctor. She also mentioned that she knows others in the same boat. And when I asked her if she finds she has to keep her income low to continue to get one of the free plans, she said yes because she couldn’t afford any more monthly outlay but didn’t want to penalized. Pick your poison - penalties and/or keeping income low. That is what this law does to people.
Regarding those “free-rider” businesses and, for that matter, free-riders in general: the broad usage of this word refers to anyone who uses government-funded medical care, and usually infers that uninsured people who could afford health insurance use emergency rooms with the intention of getting free care. Analysts at the Urban Institute found that the uninsured pay more than 25% of their health expenditures out of pocket.
The term “free-rider” is a self-serving myth. Before you insult taxpayers by name-calling, whether they are individuals or business owners, you might consider giving them the benefit of the doubt that perhaps they find coverage too expensive and are preoccupied with paying for such things as the mortgage, rent, food, heat and property taxes and/or doing all they can to keep their small businesses from going belly-up.
Once again, I say, “This law is not a success if it benefits only one part of the population but hurts others to do so. If you and the politicians wanted everyone to have access to equitable, quality, affordable care, then we would, but, alas, it’s not “politically feasible.” We all know what this means.
Here’s breaking news for you. Medicare works. It’s in place. Expand it. Everyone will be covered from womb to tomb. All MA has done is rearrange the deck chairs on the Titanic.
Gotta run. Other fish to fry.
September 8th, 2008 at 11:11 pm
Hi again,
Thanks, this is really interesting. I had a question, if you’ve got time to answer (no worries if not, it isn’t your job to help me out, after all).
Where did the census numbers come from? The US census number I had for MA uninsured before the law was around 650,000. The Urban Institute had something closer to 500,000 I think, and of course DHCFP had the 390,000 or so. I would be interested in where the bigger numbers came from.
Otherwise, for what it’s worth, a few thoughts in response. I totally agree that Commonwealth Choice is too expensive for a lot of people, and it really frustrates me that the affordability schedule goes up each year; why should someone at a given income be able to afford more a year later? I had hoped that the widening gap between affordability and the availability of plans would illustrate the need for greater government subsidies, and right now that doesn’t seem to be happening. At the same time, for those in the individual market, the plans are better and cheaper than used to be available, so it’s good for some people (better than good for nobody, right?)
I said it seemed that you believed people were forgoing income due to the law because you asserted that was the case; I was simply repeating what you had said to start my response. If the freezer were available, I don’t see how I lose it on that. Your point is that you do in fact know people who have made this calculation, and that seems fair to me. I am sure people are more than able to figure something like this out. What I do not know, and what anecdotes don’t tell me, is the scale on which this is happening. It seems from your examples that someone should look into it and find out.
Commcare doesn’t do estate recovery. I know, they should fix the application so it doesn’t imply that all the health plans have that element, I only mention this in case you want to pass that on to someone. There are ways to shield your estate from the recovery program within masshealth, too. This is not to say that the state couldn’t and shouldn’t do better on this, just that people should know that it’s possible to work around it.
Doctors and reimbursement: yes, you’re right, it is too low. Without ch 58, many people wouldn’t have coverage at all, and so wouldn’t have access to these doctors, and now their access is much less than it could be if reimbursement were higher. I am no expert on the financial story behind that, which is largely why I didn’t go into it before (didn’t feel I had a lot to add). Maybe another reader or someone from HCFA can talk about the dynamics behind public insurance reimbursement- including how Medicare does on that, perhaps?
Stress. I apologize for misunderstanding your point on this; due to my previous work as an outreach worker I often think about the paperwork as the main source of stress for people, whether in applying or dealing with the mandate. I have no doubt that the mandate is stressful in and of itself- if anybody had asked me, I wouldn’t have supported it beforehand. (I wouldn’t say I support it now, either, I just got used to explaining it to people and therefore dealing with it as a fact of life rather than a continuing debate. I think it’s fine to keep debating it, though your argument is with legislators, not with HCFA, as far as I can tell.) Insurance companies are stressful too, no argument there. Though, I don’t think they are necessarily more stressful than not having coverage at all in the case that you do need care. And for a lot of people, that is the comparison, which I think is important.
Yes, commcare should have retroactive coverage!! This is so important, and is indeed an ongoing debate. I hope this can happen soon, it’s really inexcusable not to have it. (I don’t think this negates the benefits of the program, though.)
So, the federal waiver. Is there some part of this story I’m not getting? It seemed to me that we needed the money to run our program, and that the federal govt wasn’t interested in expanding the medicaid population. If you have more of this story than I do, I would really like your insight.
I want to be clear that I do not think of uninsured people as free riders, and that I was/am aware that they are charged higher rates. I apply that term to employers who do not contribute to their workers’ health care in an economy where employment is the key to health insurance for most people. It is a bit strange that the system is this way (going back to WWII as I’m sure you know) but here we are. If they cannot pay the cost of insurance, they can pay $295 per worker per year; it’s nothing compared to the cost of coverage, and it is an amount that the business community agreed to.
I think it’s interesting that you think HCFA could achieve health care for everyone if only they wanted to. From what I saw in MA, there are a lot of people with a lot of agendas, and nobody has got all that much individual power. As for politicians, well, they respond in large measure to what they think voters want, and as I said in my last message, voters do not want single payer in large enough numbers to get action from politicians.
Medicare is complicated and I do not understand it well enough to talk about how well it does or does not work. News headlines make me think there are some problems with funding and the Rx program, but that’s neither here nor there. If we could have a national health care plan that did in fact work, that would be great, and I think it’s great for people to try to organize towards that goal if they want to. Meanwhile, I think it’s good to get whatever yardage we can when opportunities arise to cover more people.
And if you know a way to make and implement a perfect policy that will not basically be a experiment, I would love to know what it is. I don’t say that this is the only approach I know because policies don’t affect me, I say it because I cannot imagine how else it could work. I’m willing to believe your imagination is better than mine; thoughts?
Hope your other fish are well fried; I should do some frying of my own. Thanks for discussing this, I think it’s worthwhile.
September 9th, 2008 at 10:22 pm
[...] hearing. We think there are lots of solid reasons to support changing the assessment criteria (see ours and other testimony from Friday). Moreover, we’d suggest that fear of an ERISA challenge is no reason to keep the [...]
September 10th, 2008 at 1:59 pm
Chapter 58 is discrimination based on income.The poor get health care,the wealthy get health care but not the middle income.The cost of the insurance is too high and so are the dedutables.
Citizens are and will not increase their income only to be forced to buy bogus insurance.
Health care is a social issue and the Federal government should be responsible for it’s citizens,not business.What if you lose a job?Or like myself are a homemaker?Americans are brainwashed by health insurance industry.