Mass. municipalities could be hard hit by Cadillac tax

Apr 5 2010

The Boston Globe: "Massachusetts municipalities that offer employees, retirees, and elected officials the most generous and costly health insurance plans will feel the squeeze of the new national health care law's tax on 'Cadillac' insurance plans. A family health plan that costs more than $27,500 would be subject to a 40 percent tax on every dollar spent above that threshold. The tax, set to take effect in 2018, would be levied on insurers, who would probably pass it on to municipalities and other employers. A few cities and towns already have family plans that exceed $27,500, and many others are on track to surpass that level before the tax kicks in. That means taxpayers in many communities could be facing thousands of dollars in additional costs for every employee, retired worker, and elected leader they cover, unless those communities move soon to scale back coverage, a change the law is designed to encourage" (Murphy, 4/5).

The Boston Globe, in a separate story: "Thousands of consumers are gaming Massachusetts' 2006 health insurance law by buying insurance when they need to cover pricey medical care, such as fertility treatments and knee surgery, and then swiftly dropping coverage, a practice that insurance executives say is driving up costs for other people and small businesses."  These consumers' medical spending "while insured was more than four times the average for consumers who buy coverage on their own and retain it in a normal fashion. … The problem is, it is less expensive for consumers — especially young and healthy people — to pay the monthly penalty of as much as $93 imposed under the state law for not having insurance, than to buy the coverage year-round." Recent legislation filed by Gov. Deval Patrick would only allow people to enroll in insurance coverage two times per year on the individual market and would allow waiting periods before coverage begins. "But insurers say stronger action is needed. Consumer advocates caution, however, that many people who sign up for short-term coverage may merely be between jobs" (Lazar, 4/4).

The Associated Press/New York Times: "New York State's highest court has refused to order nursing homes to give state lawyers access to hundreds of psychiatric patients so they can advocate for their rights to treatment alternatives, living conditions or even release. The Court of Appeals, divided 4 to 3, concluded last week that because the state's Office of Mental Health had decided not to license the nursing homes, lawyers for the Mental Hygiene Legal Service lacked jurisdiction there. In 1996, state mental institutions began discharging patients to nursing homes for continued but lower-level care. The New York Times reported six years later that many were confined to highly restrictive 'neurobiological units' in nursing homes without lawyers to protect their interests" (4/4).

The New York Times, in a separate story: "In a major shift of H.I.V. treatment policy, San Francisco public health doctors have begun to advise patients to start taking antiviral medicines as soon as they are found to be infected, rather than waiting — sometimes years — for signs that their immune systems have started to fail. The new, controversial city guidelines, to be announced next week by the Department of Public Health, may be the most forceful anywhere in their endorsement of early treatment against H.I.V., the virus that causes AIDS" (Russell, 4/2).

(Central Maine) Morning Sentinel: "Lawmakers passed several bills in recent weeks to help consumers, including protections against charges on free trial offers, a ban on health-benefit caps and a significant reduction in copying fees for birth and death certificates. ... In the area of health care, the Legislature passed another first-in-the-nation bill that prevents insurance companies from placing lifetime health benefit limits. The measure, sponsored by House Majority Whip Seth Berry, D-Bowdoinham, will go into effect in Maine earlier than a similar limit contained in national health-care reform" (Cover, 4/5).