Recognizing that controlling health care costs is a shared responsibility, the bill provides oversight of health insurance company and provider rates by the Division of Insurance and the Division of Health Care Finance and Policy, respectively. Oversight of the reasonableness of rates charged by both insurers and providers, a temporary two-year measure, is meant to exert downward pressures on escalating health care costs as the Governor and the Legislature continue to move toward systemic changes to the state’s health care payment system. For a period of two years, this oversight triggers a presumptive disapproval for those health insurer and provider rate increases that exceed benchmarks based on the prior year’s consumer price index for medical services (2009 medical CPI is 3.2%). These rates would be disapproved, unless there is a compelling reason not to. Requires the Commissioner of Insurance to examine small business health insurance rating factors and prevent any duplicative or unjustified administrative charges that may drive up costs for small businesses. The legislation also empowers the Commissioner of Insurance to protect small businesses from rate shock caused by drastic increases in premiums driven by changes in the composition of their workforces (particularly the age of their workforces). A two year moratorium on the adoption of any new mandated benefits. Beginning in July, the bill gives smaller companies the choice of more affordable plans by requiring health insurance carriers in the small group market to offer at least one selective network plan with premiums that are at least 10 percent lower than the premiums for the full network product. Requires insurers to establish bi-annual open enrollment periods for individuals who purchase individual coverage to encourage people to maintain their health insurance.
And how badly does something need to be done? This is from the Gov’s testimony.
A woman wrote me from Hopkinton the other day. She told me about her husband’s small business located here in Boston. His business’s premiums just went up 41.17%…. The owner of a physical therapy business on the Cape got notice her premium would increase by 35% this month. In Pittsfield, a broker saw a health insurance premium increase of more than 90% this month. In Lawrence, a self-employed, single mother’s premium increased by 44%….
The Gov summed up the situation as follows:
Members of the Committee, enough is enough. On the main streets of the Commonwealth, we have an emergency on our hands. We can debate the whys and the hows of health care increases, but the strivers who are investing their energy, their time and their money to help the Massachusetts economy flourish can wait for answers no longer.
We filed our proposals in a Jobs Bill for one reason: Without small business, we will have no economic recovery. Small businesses and sole proprietorships make up 85% of businesses in our Commonwealth. If they don’t start hiring, complete economic recovery will elude us. Next to access to capital, soaring health care costs are the consistent reason given for why they can’t see their way to add more jobs. Thanks to the recommendations of the Payment Reform Commission, we have a good path to a permanent and comprehensive fix to escalating health care costs. But small businesses and families need help now-as a bridge to payment reform.
We recognize that controlling health care costs is a shared responsibility between insurance companies, providers, businesses and government. But our goal is simple: lower health care costs now, freeing up resources for businesses to hire new workers and spark growth for our Commonwealth.
And so Patrick’s winning streak continues. This bill strikes me as a political home run — and if the legislature actually passes it, it might do some real good. And the Gov is taking the opportunity to ask hard questions of his opponents — exactly what he should be doing. Looking forward to hearing what they have to say in response.