Previous Page | Print this Document

April 4, 2006 - Legislation that would require all Bay State residents to have health insurance and impose an annual per-employee fee on companies that do not contribute to worker insurance plans was agreed to yesterday by House and Senate leaders, setting the stage for a quick vote to enact the sweeping measure today. 

The plan, which aims to get up to 95 percent of residents covered over the next three years, would impose a $295 per-employee annual fee on companies with more than 10 employees that do not contribute to worker health insurance. 

The state would also impose “free-rider surcharges” up to $50,000 per company on those that do not provide worker insurance and whose employees make frequent use of the state’s free care pool at hospitals. 

The measure also would provide subsidized insurance plans for families meeting certain low-income guidelines and expand state and federal MassHealth and Medicaid coverage for uninsured children from low-income families. 

To a larger degree, the plan would rely on private insurance companies developing and selling more affordable insurance plans, possibly with high co-payments and deductibles up to $1,000 per year, to families and individuals through a state insurance exchange using pretax payroll deductions. 

Those plans, which could cost as little as $200 per month for individuals and twice that for a family of four, could be used by as many as 217,000 people who are now uninsured. Legislators said the pretax payroll deductions, not now available, would reduce premium costs by about 25 percent. 

Gov. Mitt Romney yesterday called the proposal a “once in a generation” landmark opportunity that would do something no other state has done — extend medical coverage to all residents, without any broad new taxes or adoption of a “single payer” government takeover of insurance. 

He said the “bare bones” of the plan make it “very much like” one he proposed last year, and that it relies on private insurance companies to make affordable insurance plans available. 

“This is a huge departure from conventional thinking,” over how to achieve universal coverage, Mr. Romney said. 

While the governor said he would review some new elements of the plan for possible amendments before agreeing to sign it, he supports the overall bill. Provisions to extend dental benefits to some of the nearly 1 million people on Medicaid and MassHealth, he said, could be dropped without jeopardizing the rest of the plan. 

Mr. Romney said he was relieved to see selective free-rider fees on employers who do not provide insurance included in the bill, rather than a broad-based payroll tax on all employers with deductions for health care costs. 

Under the legislation, all individuals, including children, would have to be covered by health insurance starting July 1, 2007, or face penalties when they file their state income tax returns. 

Those who do not have insurance through a private plan or by qualifying for state and federal health care would lose their individual tax deductions when they file their taxes in 2008. 

In the next year, legislators said, those without insurance would also face an assessment through the state Revenue Department that would equal half the cost of an insurance plan, estimated to be at least $1,200. That assessment would be collected as a personal tax liability. 

Senate President Robert E. Travaglini, D-Boston, and House Speaker Salvatore F. DiMasi, D-Boston, said the agreement outlined yesterday would set up an historic opportunity to provide universal health care coverage. 

The final bill, which will not be subject to amendment before it is voted on today, is also aimed at preventing the state from losing $385 million in federal Medicaid funds. 

State Sen. Richard T. Moore, D-Uxbridge, Senate chairman of the Health Care Financing Committee, said the program is expected to cost about $125 million in additional spending from the state budget in each of the first three years. 

A total of $1.3 billion annually in public and private funding would be directed to the programs, including: $320 million now paid by insurance companies and hospitals to the state’s free care pool; $50 million from the state’s free-rider assessments; $45 million from assessments on companies that do not provide worker insurance plans; $650 million in federal funds, including demonstration project funds; and $125 million in new state budget funds. 

The proposals are based on an estimate that the state has about 515,000 people without medical insurance now. State residents would be covered by a variety of new programs and would include: 

•An estimated 92,000 who would be brought under expanded state and federal health care coverage. They would include 40,000 who are eligible but not enrolled in MassHealth and Medicaid programs. 

•27,000 children in households earning up to 300 percent of the poverty level and not insured, who would get coverage through expansion of MassHealth programs. 

•18,000 who would be covered by the state raising the limit on the number of people who can sign up for MassHealth. 

•7,500 who would be covered through expansion of an existing Insurance Partnership program for low income employees. 

•207,000 who would be eligible for new subsidized private insurance programs. That includes 65,000 earning less than the poverty level ($19,600 for a family of four and $9,600 for an individual) who would get insurance coverage and pay no premiums and no deductibles for care. 

•150,000 low-income earners above the poverty level who would have to contribute toward the purchase of insurance based on a sliding scale subsidy program. 

•And 215,000 who would be expected to buy insurance without subsidies. The plan envisions them buying private insurance, including new low-premium plans with higher deductibles and possibly higher than usual co-payments. This would be done through a new state insurance exchange that would allow purchases using pre-tax payroll deductions. 

Previous Page | Print this Document