Companies that do not offer their employees health insurance would pay a $2,000 annual assessment per full-time worker to the state under a plan Gov. Charlie Baker plans to offer later this month to blunt the impact of escalating, enrollment-driven costs in the state’s Medicaid program, the State House News Service has learned.
The proposal – the bulk of which is expected to be filed within the governor’s budget due on Jan. 25 – would also impose growth caps on the rates health providers can charge for medical services in an effort to control the cost of care in the commercial market and make it more affordable for employers.
Both ideas come as the state is grappling with questions about how to control growth in health care costs in the public and private markets and as enrollment in MassHealth has reached an all-time high – a projected 1.93 million people in fiscal 2017 – putting unsustainable pressure on state finances.
Provider price caps in the commercial market are also part of the administration’s plans, according to officials, as a cost control measure designed to make insurance plans more affordable for employers and employees and to discourage avoidable enrollment in MassHealth.
The employer assessment, which would bring an estimated $300 million into state coffers, represents a revival of the so-called fair share contribution plan that was a linchpin of the 2006 universal health care law in Massachusetts before it was repealed to make way for the federal Affordable Care Act.
The details of Baker’s multipart plan to address the costs that come with surging enrollment in MassHealth despite low unemployment, population growth, and the highest rate of insured residents in the country were laid out in an internal policy planning document obtained by the News Service. The contents of the 15-page document were subsequently confirmed by the administration.
The expansion of insurance subsidies under the ACA has also led to an increase in full-time workers choosing MassHealth over employer-sponsored coverage.
MassHealth, the state’s Medicaid program providing subsidized health care coverage to low-income residents, is projected to grow by $1.25 billion in fiscal 2018 with a net increase of $563 million for the state without reforms, according to the documents. The Baker administration attributes $600 million in increased costs to enrollment growth.
Health and Human Services Secretary Marylou Sudders and Administration and Finance Secretary Kristen Lepore said the combined effort to control costs for employers, impose a new assessment, improve internal controls and seek greater flexibility from the federal government would hold the net growth in MassHealth expenses after federal reimbursement to roughly 2 percent in the coming fiscal year.
