State and national health care policies differ over small business, subsidies
Amid a maelstrom of reactions to the Sunday night passage of national health care legislation, local policymakers and health industry advocates have begun identifying some specifics that could shake up the debate in Massachusetts.
"The federal bill differs in significant ways from the Massachusetts reform in ways that could help or harm companies to the tune of thousands of dollars," according to a post on Associated Industries of Massachusetts business blog. "The biggest uncertainty revolves around instances in which the state and federal health reform regulations disagree. In those cases, will employers be required to comply with the state regulation, the federal regulation or both?"
Although many of the broad outlines of the federal bill were modeled after Massachusetts's first-in-the-nation 2006 law aimed at insuring all of its 6 million residents, the federal government established a new set of guidelines for who is eligible for subsidized insurance coverage and which businesses must offer health plans to their workers.
Under the 2006 Massachusetts law, residents earning below $32,000 - three times the federal poverty level - are eligible for taxpayer-subsidized coverage. But the federal bill would extend subsidized insurance to individuals earning four times the federal poverty level, which some advocates said could put pressure on the state to follow suit.
In addition, although the federal and state policies require individuals to purchase health insurance, federal penalties for those who fail to obtain coverage will begin in 2014 at $94 a year and grow to 2.5 percent of annual income or $695 by 2016. State penalties can reach $1,116 a year for residents who fail to purchase health insurance.
Massachusetts requires any businesses employing 11 or more workers to insure 25 percent of their full-time workforce and pay a third of their premiums. Businesses who don't meet this threshold must pay a $295 a year fine per employee. Under the federal law, only businesses with 50 or more employees would be subject to fines. Those fines, $2,000 per employee, would exempt the first 30 employees.
"There could be some pressure to change things," said Rep. Harriett Stanley (D-West Newbury), House chair of the Committee on Health Care Financing.
Ms. Stanley said she hopes the state continues to require companies with 11 to 49 workers to provide health insurance. She said the state Connector Authority, which has implemented and overseen the Massachusetts law since its inception, may choose to tackle the discrepancies itself but didn't rule out action by the Legislature.
Ms. Stanley's co-chair, Sen. Richard Moore (D-Uxbridge), said Massachusetts must now look at whether to extend subsidized insurance coverage to residents earning four times the poverty level, particularly those over 55 years old but not eligible for Medicare. "That's been an issue for some of them to find an affordable plan," he said.
As for small businesses, Mr. Moore worried that even if businesses with fewer than 50 workers were relieved of having to purchase insurance, their employees would still be subject to the mandate to buy coverage.
William Vernon, state director of the National Federation of Small Business, said that while he'd prefer there be no national health care law at all, he'd like to see Massachusetts sync its health policy with the federal government's. "We're always interested in having less confusing statutes," he said. "It certainly wouldn't be the first time Massachusetts had something more anti-business than the federal [government]."
AIM, on its blog, also pointed out that while the federal proposal offers tax credits to certain small businesses that provide health care for their workers, Massachusetts offers no comparable incentives. The group also said it expects national minimum insurance coverage standards to differ from state rules.