State health chief briefs business leaders on new insurance law
by Statehouse News ServiceMAY 25, 2006 -- Is the new health care reform law opening the door for companies to drop employees, increasing the number of the state’s uninsured? What happens to a company with fewer than ten employees? What if a company has 12 employees, but most of them are in other states? And how does a company deal with employees choosing state-sponsored health care over the company’s plan? The state’s top health and human services chief answered those questions and more today at the last of five regional meetings held by business groups as the state moves to swiftly implement the sweeping health care reform bill signed into law in April.
“Let me tell you this: It’s happening and it’s happening now and it’s happening fast,” Health and Human Services Secretary Timothy Murphy told a crowd of 100 individuals from business and healthcare organizations sitting in the Federal Reserve’s auditorium. “The Romney administration only has several months. We have a real stake in making sure that this works well, and so we’re going to be very aggressive time-wise.”
Murphy also advised companies to work with the large business organizations as a way to raise questions. Associated Industries of Massachusetts (AIM), which co-sponsored the briefing with the Greater Boston Chamber of Commerce, the Massachusetts Taxpayers Foundation (MTF), and the Massachusetts Business Roundtable, will be working with the administration to get them answered.
“Given how many different things are occurring, what I would suggest to folks is you need to ask questions about what would impact your particular businesses, and get involved with various organizations that we communicate with on almost a daily basis now,” Murphy said. The administration, through the business groups, can provide “greater clarity” and lay out specific aspects of the bill, he said.
“The next few months will be intense,” acknowledged Michael Widmer, head of the Massachusetts Taxpayers Association, a business-backed watchdog group.
“There are hundreds and hundreds of questions,” he told the News Service. “The more informed they are about some of the specific questions, the better.”
Asked by an audience member whether the new law will cause companies to stop offering health insurance, adding more people to the uninsured rolls, Murphy said the market’s dynamic isn’t changed “one bit” by the new law.
Companies, which have the ability to drop employees now, will continue to offer benefits because it’s a requirement in attracting good workers, Murphy said. “The state is actually making it easier for people to buy insurance,” he said.
For one businessman who was concerned about having 12 employees, but only three of them in the state, Murphy assured him the company would not face financial penalties.
For companies with fewer than 10 employees, Murphy said the law’s mandate that individuals possess insurance by July 1, 2007 will cause some conversations between workers and their employers.
“Now these employers, if they would like, can come to the Connector,” he said, referring to the Commonwealth Health Insurance Connector Authority, which will serve as the backbone of the new system, providing technical assistance to small businesses so they could offer multiple affordable insurance products to their employees.
Murphy and Administration and Finance Secretary Thomas Trimarco today announced the selection of Tufts Health Plan executive Jon Kingsdale as the incoming executive director of the new authority.
One audience member asked what happens if a worker decides to forgo the insurance the company is offering and opts for state-assisted coverage instead.
Murphy said the company would be doing the right thing in offering the health insurance, and the individual mandate would take over, telling the individual: “You should be prepared to pay a penalty and pay for your health care.”
“That is a cultural shift and I recognize that,” he said. “People have to have some responsibilities. That is the demand of this bill.”
Another audience member raised questions on how seasonal workers would be affected.
Murphy said the full definition of a Massachusetts resident is in the bill, and “I don’t want to hazard a guess.” But seasonal workers will be addressed as they go over regulations in the next three to six months, he said.
Audience members seemed satisfied with Murphy’s answers. “I think he did a fantastic job,” said Russell Kopp, who served on a Dukakis-era commission, which attempted to regulate hospital charges and control health care costs. He now runs his own consulting firm.
“Clearly this is a work in progress,” he said. “That’s always the process.”
“That process is just beginning,” said Richard Lord, head of the Associated Industries of Massachusetts. “I think he answered the [questions] he has answers to.”
The rest of the questions, attendees said, are about regulations, which will be dealt with by the state’s Division of Health Care Finance and Policy, under the Executive Office of Health and Human Services.
Through a Power Point presentation, Murphy took the crowd through the new law, focusing on containing new costs and creating more efficiency.
Electronic health records need to be encouraged in the new system, Murphy said. “We do a great job in medicine when it comes to information technology. We don’t do a great job about clinical information, about you, the patient.”
Any time a person goes to a new provider, the first thing they get is the clipboard, having to fill out their medical histories, he said.
“Think about the inefficiency of that,” Murphy said. “Think about how you don’t remember everything about what you’ve taken, or your medical history, or your parents or grandparents’ medical history.”
In terms of containing costs, a merger of the individual and small markets creates a larger risk pool but causes a drop in cost of between 20 to 40 percent, he said. The existing market is “very paternalistic,” Murphy said. “No one in this room should be surprised. It’s Massachusetts and we as a state like to regulate everything.”
“And we’re looking to regulate more things – like hospitals after yesterday’s vote,” he added to laughs, referring to yesterday’s House vote to set standards on how many patients a nurse can care for.
The meeting was the last of five regional briefings from Murphy and aides over the last two weeks. Others were held in Taunton, Westborough, and Chicopee.
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