Armed with a letter from Gov. Deval Patrick, Massachusetts employers are urging members of the state’s Congressional delegation to pressure the Obama administration to waive Affordable Care Act requirements that could drive up health insurance premiums for small businesses.
Acting under orders from the state Legislature, Mr. Patrick in a letter on Sept. 3 formally asked Health and Human Services Secretary Kathleen Sebelius to waive market rating rules to “avoid increases in health insurance premiums for a large segment of our small employer population and their employees.”
Massachusetts is the only state with a merged insurance market for individual and small employer coverage, Mr. Patrick said in his letter, and 720,000 residents are covered under that merged market, helping the state to a 97 percent insured rate. Implementing federal rating factors, Patrick wrote, “will disrupt the relative stability that the insurance market has achieved in Massachusetts since our markets merged” in 2007.
Mr. Patrick and lawmakers are under self-imposed pressure to limit health care cost increases to the rate of inflation, the goal of a 2012 law aimed at reforming payment and care delivery systems to squeeze out unnecessary spending.
In his letter to Ms. Sebelius, Patrick said her office had approved more than 1,200 applications for temporary waivers from Obamacare restrictions on annual benefit caps, and asserted “there is no language expressly prohibiting waivers of the rating factor requirements.”
Governor Patrick also said the Obama Treasury’s extended timeline for implementing “employer responsibility” requirements under the ACA and the administration’s grace period for insurers to comply with limits on out-of-pocket costs “shows a willingness to accommodate the needs of the market.”
Associated Industries of Massachusetts, a trade group that represents employers, highlighted Patrick’s request last Wednesday on its website and said the “limited waiver” would enable Massachusetts to maintain the current nine rating factors in its merged market and to maintain quarterly rate filings, rather than annually.
“Governor Patrick correctly noted that Massachusetts has a health insurance system that is a model for the rest of the country. It makes no sense to introduce changes to that system that will increase premiums for struggling employers and their workers,” AIM’s vice president of government affairs Kristen Lepore wrote.
Ms. Lepore noted that a recent study commissioned by Massachusetts health insurers predicted that changes under federal health reform, independent of other rating factor changes, will raise premiums by Bay State employers by an average of 3.7 percent on top of typical base-rate increases, and that rating changes could raise or lower rates for companies by up to 57 percent.
The Patrick administration has secured an agreement to phase in the rating changes over three years. Patrick has said that in conversations with Sebelius and President Obama, the administration told the state it did not have the authority to grant a full waiver.
In late July, after lawmakers ordered Mr. Patrick to formally request the ratings factor waiver, the governor expressed little optimism for winning a full waiver.
“I’m so done with that,” Patrick said. “If they want me to send a formal letter to confirm the conversation I’ve already had with the secretary of HHS, I’m happy to do that. I have spoken to the president about it as well. And I’m happy to do it again, and put it all in writing. And I have reported to you and to others what the response was, which is that they can’t give us what they don’t have the legal authority to give us. They gave us what they could.”
