Health Care Reform Massachusetts Style
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- Phyllis Harrison
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1 Health Care Reform Massachusetts Style NAHC State Forum February 2010 Almost every American and advocacy group supports some form of Universal Health Insurance. But if it s not their preferred version, their second best alternative is to maintain the status quo. Altman s Health Care Reform Law #1 (Stuart Altman)
2 A New Political Paradigm??
3
4 Health Care Reform Signed into Law An act to provide access to affordable, quality, accountable health care,
5 Why?
6 Massachusetts Had a Good Starting Point Relatively low rate of uninsured (7%) ; and higher than national average degree of employer sponsored healthcare Broad Medicaid program and federal waiver for matching funds for expansion of access Almost $1 billion in an Uncompensated Care (Uninsured) Pool; funded in part by assessment on health plans and hospitals; paid by employers Highly regulated small group and individual health insurance markets (preexisiting conditions, etc) Dominant insurers are local and non-profit; hospitals are almost all locally owned and non-profit
7 Shared Resposibility: Individuals Individual Mandate: All adult residents of the Commonwealth required to maintain health coverage, with certain exceptions Connector Board establishes what constitutes minimum creditable coverage (MCC) for most adults Tax penalty for not having insurance: $219 (loss of personal exemption) in 2007 Can be as much as $912 for 2009 (half the cost of lowest-priced plan) Affordability waiver based on age and income
8 Shared Responsibility - Government Medicaid expansion: Children s coverage expands to 300% fpl from 200% fpl Insurance Connector set up as quasi-public authority 10 member board Provides Commonwealth Care - subsidized coverage for below 300% fpl Provides Commonwealth Choice non-subsidized affordable coverage for individuals and small business Defines individual mandate
9 Shared responsibility - Insurers Develop plan offerings that meet state s tiered MCC coverage and offer to connect according to state negotiated premiums Cover kids of working insured up to age 26
10 Shared Responsibility: Employers An employer with 11 or more full-time equivalent employees (FTEs) must make a fair and reasonable contribution toward the health costs of its workers. An employer that is determined no to make a fair and reasonable contribution has to pay a Fair Share Contribution (FSC) of up to $295 per FTE. Employers must facilitate Section 125 cafeteria plan for pre-tax health insurance, or pay penalty
11 What it Looks Like Now- Newly Insured Residents June 2006 March 2009 Composition of Newly Covered Employer Sponsored 96,000/24% Comm Choice/Nongroup 46,000/11% MassHealth 99,000/24% CommCare, Contributory 55,000/13% CommCare, Free 121,000/29% Source: Commonwealth Health Care Connector: Update on Status of Health Care Reform, October 2009
12 As a Result..
13 Partners Health Care - 16,000 14,000 12,000 patients 10,000 8,000 6,000 4,000 2,000 0 FY07 Q1 FY07 Q2 FY07 Q3 FY07 Q4 FY08 Q1 Commonwealth Care Free Care
14 Issues To Watch For as employers What is Considered a Fair Offer of Insurance? The Fair Share Contribution regulations that took effect starting in October 2006 applied the following two-pronged test: Primary Test: At least 25% participation by full-time employees in the employer s group health plan. Secondary Test: Employer offers to contribute at least 33% of the premium cost of its health plan to all full-time employees employed more than 90 days. An employer that met either test is considered to have made a fair and reasonable contribution to the health care costs of its workers and is consequently exempt from having to pay a Fair Share Contribution of $295 per full-time equivalent employee.
15 Industries with the Highest Percentage of Firms Not Meeting Fair Share Contribution Standards by Fiscal Period FSC07 FSC08 Industry % Firms Industry %Firms Security Guards and Patrol Services 43% Security Guards and Patrol Services 37% Temporary Help Services 33% Temporary Help Services 27% Janitorial Services 28% Drinking Places (Alcoholic Beverages) 24% Full-Service Restaurants 23% Employment Placement Agencies 24% School and Employee Bus Transportation 20% School and Employee Bus Transportation 19% Employment Placement Agencies 20% Full-Service Restaurants 19% Limited-Service Restaurants 16% Home Health Care Services 17% Home Health Care Services 16% Janitorial Services 17% Drinking Places (Alcoholic Beverages) 16% Limited-Service Restaurants 12% Supermarkets and Other Grocery (except Convenience) Stores 15% Supermarkets and Other Grocery (except Convenience) Stores 9%
16 Issues To Watch For What who and how the state exchange is set up, if.. What is Considered Affordable Coverage How part-time workers are treated If an exchange is set up with minimum coverage requirements, is home care a required or optional benefit
17 Issues to Watch For Escalation in individual penalty for noncompliance Exemptions due to unaffordability of coverage/premium escalation Cost of care bending the cost curve (a whole other presentation!!) Cost of insurance for small business (Defined as <11 employees)
18 Massachusetts Health Reform. Report of Mass Taxpayers Foundation,
19 What s Next: Cost Containment Payment Reform : implement ACOs System Reform: All Primary Care Practices are medical homes by 2015 Transparency: public reporting of cost and quality measures Evidence based care: palliative and end of life care (expert panel)
20 More on Fair Share Approximately 24,000 employers filed that had 11 or more FTEs 1,011 firms passed contribution but failed take-up (pass) 1,434 firms failed contribution but passed take-up (pass) 20,630 firms passed contribution and passed takeup (pass) 855 firms failed both the take-up and contribution tests (fail) Firms that failed: Constitute about 3.6% of all firms with >11 FTEs Owe approximately $7.7 million
21
22 Physicians For National Health Plan - Feb 2009 By mandating that uninsured residents purchase private health insurance, the law reinforced the economic and political power of health insurance firms. Thus, the reform augments the already high administrative costs of health care. Moreover, the agency that administers the new law (the Connector ) adds an extra 4 to 5 percentage points to the already high overhead of private health insurance policies. The reform failed to reduce overreliance on expensive, high-technology services.
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