Massachusetts' proposed rule could lead to Federal lawsuit, Partners HealthCare warns

Sep 10 2008

Massachusetts' largest private employer Partners HealthCare on Friday warned that the state could face a federal lawsuit if it implements a proposed rule to increase some companies' contributions to their workers' health coverage, the Boston Globe reports.

Partners, a supporter of the state's health insurance law, was one of dozens of business and consumer groups to testify at a public hearing on the proposed regulation (Lazar, Boston Globe, 9/6). Under existing state law, businesses with more than 10 full-time workers must offer health coverage or pay an annual penalty of $295 per worker. Employers could choose either to cover at least 33% of their workers' premiums within the first 90 days of employment or ensure that at least 25% of their full-time workers are enrolled in an employer-sponsored plan.

The proposed regulation would require employers to comply with both requirements or pay the annual penalty. Public documents released on Monday stated that the regulation, if adopted, would be implemented on Oct. 1. The new rule would generate an estimated $45 million this fiscal year, which would be used to close a funding gap in the state's health insurance law (Kaiser Daily Health Policy Report, 8/13).

Matt Fishman, Partners vice president for community health, said courts have thrown out state laws that directly impose requirements on employer-sponsored health benefits and the proposed regulation could prompt a federal court ruling that would eliminate a portion of the state's health insurance law. In a later interview, Fishman said, "That would say to the nation that Massachusetts' health reform law is perhaps not as successful as many thought, even though the coverage numbers are so strong." Fishman said that Partners does not intend to file a legal challenge.

Consumer groups at the hearing testified that businesses need to contribute and support the regulation. The Rev. Hurmon Hamilton, president of the Greater Boston Interfaith Organization, said, "We need to make sure that the less than 30% of employers who do not cover their workers do not freeload."

Sarah Iselin, commissioner of the Division of Health Care Finance and Policy, said, "We heard many concerns expressed, as well as support by many parties, all of which we will take under advisement as we move forward." She said that the agency carefully considered the legal risks before proposing the rule and that an estimated 90% of affected companies are expected to comply with the regulation (Boston Globe, 9/6).

State Budget

In related news, Massachusetts could be facing a $600 million budget shortfall in FY 2009 and tax collections could fall short by $400 million for the fiscal year, according to a report prepared last month by the state treasurer and the state secretary of administration and finance, the Springfield Republican reports. The report attributed the unexpected costs primarily to energy prices and increased expenses for Medicaid and Commonwealth Care, which provides subsidized health care for low- and moderate-income residents, among other programs. The secretary of administration and finance is putting into effect a plan for dealing with potential revenue shortfalls and the heads of state agencies are developing plans to cut budgets in the event that tax collections fall below projections (Ring, Springfield Republican, 9/4).

Letters to the Editor

The New York Times on Sunday published several letters to the editor addressing a recent Times' editorial about the Massachusetts health insurance law. Summaries appear below.

• Joshua Freeman: The Times' Massachusetts editorial "does not mention that there are not enough primary care doctors in the state to care for the newly insured," Freeman, chair of the Department of Family Medicine at the University of Kansas School of Medicine, writes in a Times letter to the editor. He continues, "Research shows that systems built upon primary care provide higher-quality care at lower cost, and can eliminate health disparities due to socioeconomic status," but in the U.S., "we have too few primary care doctors, and even fewer medical students entering primary care training." He concludes, "Whatever method of financing for universal care we adopt, we will need more primary care doctors" (Freeman, New York Times, 9/7).
• Leonard Rodberg: The Times editorial's conclusion that the Massachusetts health insurance law "looks more and more successful" is "decidedly premature," Rodberg, a professor of urban studies at Queens College and research director of the New York Metro Chapter of Physicians for a National Health Program, writes in a Times letter to the editor. He continues that the law "did not change the structure of health finance in Massachusetts," adding, "It simply added government subsidies for the poor and required that anyone else who was uninsured purchase coverage or receive a tax penalty." According to Rodberg, "The cost of health care in Massachusetts is continuing to rise faster than the cost of living -- by 10% in just the past year," and soon it will "outstrip government subsidies and the willingness of employers to provide decent coverage for their employees." He concludes, "Leaning on government subsidies that can't be sustained, and requiring people to buy insurance they can't afford, is not a solution. Only a real change in the way we pay for health care can truly address our long-term problems. Using a single public fund, an expanded Medicare for all, would provide the budget and planning tools to contain costs while generating enough savings to cover the uninsured and the underinsured" (Rodberg, New York Times, 9/7).
• Paul Hsieh: "Far from being a 'success,' Massachusetts health care 'reform' has cost the state hundreds of millions of dollars more than anticipated and created long waits for care" and is "just socialized medicine in a new guise," Hsieh, co-founder of Freedom and Individual Rights in Medicine, writes in a Times letter to the editor. He continues, "It is no coincidence that the long waits for care in the state resemble the long bread lines in the Soviet Union," adding that the "fundamental problem with the Massachusetts system (or any system of 'universal health care') is that it erroneously treats health care as a 'right.'" According to Hsieh, "There is no such thing as 'right' to a good or service that must be created by others -- that's just state-sanctioned theft or slavery." He concludes, "The problems in Massachusetts are the inevitable result" (Hsieh, New York Times, 9/7).