Proposed health care minimum criticized as inadequate

August 8, 2006 | By Mark Jewell, Associated Press Writer

BOSTON --Affordable health care advocates on Tuesday said a key piece of the state's new health insurance law asks far too little of businesses, requiring them to provide employees only bare-bones coverage to avoid a $295 per-worker fee for companies offering no insurance plan.

But business organizations said a proposed coverage rule that's part of the law accurately reflects a legislative compromise intended to guarantee coverage for virtually all state residents.

The rule's supporters said lawmakers who reached the deal in the spring shared a modest goal: ending an unfair system that allowed companies offering no insurance to get a free ride by relying on more generous employers to help foot the bill for uninsured medical expenses.

The Democrat-led Legislature that adopted the nation's most ambitious health care reform didn't embrace the broader goal of requiring employers to meet minimum coverage levels, the rule's supporters said.

"It's revisionist history for advocates who would like to see that," Michael Widmer, president of the business-backed Massachusetts Taxpayers Foundation, said at a public hearing where about 15 people testified.

At issue is a rule proposed by the state Division of Health Care Finance and Policy to define what constitutes a "fair and reasonable" health care contribution for employers with 11 or more workers. The law uses that language as a benchmark to determine which employers must pay the $295 per-worker annual assessment to help finance the initiative.

The rule is expected to be made final next month.

It would enable companies to avoid paying the $295 if they agree to contribute 33 percent of the cost of an individual employee's health care premium. As an alternative, employers could avoid the fee if at least one-quarter of their full-time employees choose to enroll in the company's group health plan, regardless of how much coverage is included. Employers can't meet the 25 percent requirement by counting workers insured through spouses.

There's no requirement to cover part-time, seasonal and contract workers.

Critics cited data showing that employers nationwide who offer insurance cover more than three-quarters of their full-time workers' individual health costs -- far above the 33 percent minimum in the state rule.

The 33 percent requirement could encourage some employers to reduce coverage to that level, critics said.

"A fair and reasonable contribution should reflect the current market," said Philip Edmundson of Massachusetts Business Leaders for Quality Affordable Health Care, which has joined nonprofits and unions in a coalition opposing the rule.

The 33 percent requirement would reduce benefits "to the point of being practically meaningless," said John McDonough, executive director of Health Care for All. He and other critics suggested a 50 percent requirement, and prorating coverage requirements for part-time workers based on the number of hours worked.

McDonough said the agency that wrote the rule should "go back to the drawing board."

But Widmer, who attended some of the closed-door meetings that led to the legislative compromise, said the rule successfully drew a bright line between employers who provide coverage and those who rely instead on the so-called "free care pool" that reimburses hospitals for people without insurance.

Another supporter, Eileen McAnneny, of Associated Industries of Massachusetts, said the purpose of the $295 assessment "is to equalize the burden of paying for free care."

"Any employer who currently contributes to health care coverage is contributing to the costs of free care, and, therefore, they should be exempt," McAnneny said.

Republican Gov. Mitt Romney vetoed the fee, saying the money it would raise wouldn't be needed to adopt the initiative. But lawmakers overrode the veto to restore the fee.

The new law aims to move as many of the state's estimated 550,000 uninsured into health care plans as possible by next July.

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