07/16/2008
Final weeks
The Legislature will be very active in the final weeks prior to the end of formal sessions on July 31. It is important that small business owners contact their legislators, particularly about legislation that will affect the cost of health insurance for small business owners and for those who work in small businesses.
Health insurance: 75 percent is not enough
Employers pay 75 percent of health insurance premiums for private employees, but apparently that is not a fair share, according to the Patrick administration. The governor proposed regulatory and statutory changes in the state's health insurance reform law that would increase annual fair share contribution costs to employers five-fold to $38 million -- with much of the burden falling on small businesses, retailers, and others that employ large numbers of part-time and seasonal workers. In addition, the governor's plan calls for employers to make their "fair share contribution" filings quarterly rather than annually. Finally, what the governor called the "state's contribution" of $35 million actually would divert money from a fund called the Medical Security Trust Fund, which is 100 percent paid for by employers and intended to be used to pay health insurance premiums for unemployed workers.
The proposal would increase business owners' responsibilities prior to enactment of any significant cost containment legislation even though all parties to health insurance reform now concede that the great unfinished business of health reform is the need to address costs. We have access to healthcare; we have quality healthcare; we do not have affordable healthcare; we do have annual double digit annual percentage increases in premiums.
Small business owners also await implementation of that part of health insurance reform that would allow small business owners to make a defined contribution to allow their employees to shop for a health plan at the Connector. The provision was scheduled for implementation on July 1, 2007. After another delay, we now have a promise for a pilot program to be effective on Jan. 1, 2009!
To let the Legislature know that you think it is time to get serious about healthcare cost relief for small business owners and their employees, please click here.
FY 09 state budget
Observers are struck by the uncertainties surrounding the just passed state budget for the fiscal year ending June 30, 2009. Despite the governor's veto of some $120 million in spending, most think the state's revenues will fall about $1 billion short of spending plans. For example, the state is still negotiating continuation of an annual $600 million federal Medicaid waiver grant. The waiver was given to Massachusetts to help with implementation of the new health insurance law, but the new law's failure to reduce the costs of providing care to the uninsured (despite increased numbers of insured) has disappointed federal officials. The budget also relies on $175 million from the recently enacted cigarette tax increase -- a projection that is highly suspect with smokers having several options to buy cigarettes not subject to the Massachusetts tax. Finally, the governor relies on the not yet passed increased healthcare fees from businesses (see above) to further close the gap. Final FY 08 revenue numbers will be released this week.
Legislative activities on various bills
The Judiciary Committee has not yet released, as had been expected, its own version of legislation that would limit employers' access to information about the criminal records of prospective employees (CORI). The Ways and Means Committee has reported legislation to prohibit auto insurers from steering consumers and business away from independent auto glass repair shops (Houses Bill No. 1102). Legislation to prohibit the use of eminent domain to take land "for commercial development, private economic development or any private use of the property" received near final approval in the House and was sent to the Senate (House Bill No. 1770). The bill would specifically prohibit the taking of property from one owner on the grounds that the public will benefit from a more profitable use.
Healthcare mandates
A state report attempted to downplay the impact of mandates on health insurance costs but still conceded mandates add 12 percent to the minimum premiums and that avoidable mandates add 5 percent to premiums for minimum coverage.
In the Legislature, the battle to limit healthcare cost increases from mandates continued on several fronts. Legislation to require basic insurance policies to include coverage for non-biologically based mental health issues remains in the Senate after passing the House (House Bill No. 4423). The Senate is also considering legislation to increase minimum coverage from $2,500 to $5,000 for the cost of specialty food for those with gastrointestinal disease (House Bill No. 925). In response to House approval of legislation to allow the state to establish nurse staffing ratios at hospitals (House Bill No. 4783), the Senate has given initial approval to substitute legislation (Senate Bill No. 2805). Cost estimates of the House version of the nurse staffing bill were significant -- $200-$500 million per year.
The Senate approved and sent to the House a bill that slightly expanded benefits for children with mental health issues but the previously mentioned bills that are pending in the Senate pose much larger financial impacts on health insurance costs.
And the House has taken up the Senate healthcare cost containment bill (Senate Bill No. 2660) substituting its won version (House Bill No. 4974). NFIB believes Senate 2660 and House 4974 should be the focus of the Legislature's attention in the final weeks of the session as they alone address the health insurance cost issue by improving consumer choice through cost and outcome information and healthcare provider transparency.
