A healthcare reform bill introduced last week in Massachusetts resurrects an insurance idea thought to be on life support: mandatory employer participation in a program to provide coverage for their workers.
Democrats in the state House of Representatives proposed requiring employers to pay at least 50% of the cost of a basic health benefits plan for employees who work at least 20 hours a week and are not covered by any other health plan.
It's an "accountability" measure to assure that the centerpiece of Gov. William Weld's reform proposal-a system of tax breaks for employers and subsidies for low-income employees-gets enough takers to substantially reduce the state's estimated 700,000 uninsured population, said Rep. John McDonough, a Bos-ton Democrat and the legislation's chief sponsor.
Weld's incentives are included in the bill, along with proposals to expand coverage to 75,000 uninsured children and subsidize the cost of necessary prescription drugs for elderly people.
Without the employer mandate, the state could end up subsidizing employers that currently provide insurance while others for which the program is intended choose not to participate, McDonough said. That would "erode the already dysfunctional healthcare safety net" in Massachusetts, he said.
But the Massachusetts Hospital Association said it's concerned that the funding provisions of the bill would construct that net for the uninsured by yanking away the one suspended under hospitals to support a level of uncompensated care estimated at half a billion dollars a year.
The House proposal would use $200 million of the $300 million that's collected annually for a state uncompensated-care pool through a direct assessment on hospital revenues.
McDonough called the move "temporary" until the bill's provisions reduce the number of uninsured people for which the pool would be necessary. The pool would then be replaced by a smaller funding mechanism for the "residual" uninsured population that remains.
But MHA spokesman Andrew Dreyfuss said the funding for uncompensated care needs to be reformed and strengthened at the outset rather than later on or else hospitals would take the brunt of the transition.
Unlike most other states, Massachusetts doesn't have comprehensive public healthcare facilities to care for the uninsured, Dreyfuss said. The existing pool already pays hospitals only 46 cents on the dollar for the uncompensated care they provide, he said.
Republicans and small-business advocates also criticized the House proposal last week for its imposed costs, which also include a 25-cent-per-pack increase in the state cigarette tax to pay for the increased coverage of children and prescriptions.
"We simply cannot embrace the employer mandate included in this legislation, nor can we support the tax increase," said Gerald Whitburn, Weld's secretary of health and human services.
Weld has opposed an employer mandate enacted during the administration of his predecessor, Michael Dukakis. Lawmakers have postponed implementation several times while trying to come up with a less burdensome alternative.
McDonough said the new proposal is less of a burden in three ways:
It proposes state financial support for employers through the $200 million from the uncompensated-care fund, unlike the earlier law that included no state share.
Its mandate calls for employers to offer 50% of the cost of individual coverage, compared with the earlier mandate of 80% of the cost of family coverage.
It leaves employers free to seek insurance at whatever price they can get it, rather than requiring them to pay a set amount of $1,680. The postponed law required employers to pay the difference to the state if they got insurance coverage for less, McDonough said.