Thursday, September 19, 2013

Time for a Moratorium on Expensive Health Insurance Mandates

Massachusetts should place a moratorium on expensive new health insurance mandates or require a premium impact statement for proposed mandates, AIM told Beacon Hill lawmakers today.

Kristen Lepore, Vice President of Government Affairs at the association, said Massachusetts has passed a dozen health coverage mandates since the 2006 reform and that the cost of those mandates falls disproportionately on small businesses and their employees.

“Massachusetts employers and consumers already pay the highest health-care premiums in the country at $16,953 per year for a family plan and these costs are expected to increase in the coming year as many components of the Affordable Care Act add costs to insurance premiums,” Lepore told a hearing of the Legislature’s Joint Committee on Health Care Financing.

“ The state should not be adding to the already high cost of health insurance and must therefore resist adding new mandates to health insurance coverage.”

The cost of a family health insurance plan in Massachusetts increased 72 percent from 2003 to 2011, raising the burden on purchasers from 12.6 to 18 percent of median family income.

A moratorium would help state government as well, according to Lepore, because health mandates also add liabilities to the budget.  According to guidance from the U.S. Department of Health and Human Services, the state has a financial obligation to pay for any increased costs of additional mandates passed after December 2011 that go beyond the state’s benchmark plan.  The state is already under financial obligation to pay for the increased costs associated with three new mandated benefits passed since this new rule took effect.

The moratorium bill would also repeal the requirement that the state produce an annual so-called Fifty-Plus Report  - known colloquially as the “Name and Shame” report- that identifies employers with 50 or more employees receiving health services through one or more of the state’s publicly subsidized health care programs. The report is unnecessary and unfair since employers are carrying out their legal responsibilities under the law and are offering the required health insurance coverage to benefit eligible employees.

Lacking a moratorium, AIM supports legislation requiring that a premium impact statement accompany all health insurance and health care related legislative and regulatory changes.

“All too often, legislative bills are passed and regulations are made, without an understanding of the effect they will have on insurance premiums.  Creating new mandated benefits is the obvious example but also consider the following regulatory and legislative decisions that impact premium costs,” Lepore said.

She offered several examples of recent regulatory and legislative decisions that have increased premiums:

  • Requiring that all Essential Health Benefit changes apply to both the small and large group market.
  • Requiring that gym memberships and weight loss discounts be included in the state’s Essential Health Benefits.
  • Requiring compliance with and implementation with reporting to the state’s All Payer Claims Database (APCD).
  • Expanding infertility by regulations.

AIM also supported a proposal to repeal the so-called Free Rider Surcharge created under the state health reform law. The provision is no longer required as Massachusetts conforms to the requirements of the new federal Affordable Care Act.

John Regan AIM Business Insider

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