Mass. Senate approves health costs bill to help small biz pay health costs and other state news

The Associated Press: The Massachusetts Senate Tuesday approved a bill that would make wealthy hospitals pay $100 million in a one-time contribution to help small businesses ease insurance premiums. "The bill would let businesses with 50 or fewer workers form cooperatives to purchase insurance at a lower cost. Another provision presses insurers to spend at least 90 percent of premium dollars on care and 10 percent or less on administrative costs. Senate President Therese Murray said the bill, which passed on a 33-4 vote, will ease instability in the insurance market, smooth out annual fluctuations in premiums and require insurers offer affordable small business plans." Proponents say the money paid by wealthier hospitals could save 2.5 percent in premium costs for small businesses in health care costs. "Senate Minority Leader Richard Tisei, R-Wakefield, said the assessment amounts to a tax increase on hospitals. He said some bigger hospitals might be able to afford it, but smaller community hospitals might not" (LeBlanc, 5/18).

Cape Cod Times: "Partners Healthcare, which runs seven hospitals in the state, including Massachusetts General, Brigham and Women's and those on Martha's Vineyard and Nantucket, would likely contribute more than $40 million." The contributions would be based on a formula to determine how much each provider will contribute. "The legislation, in its first year, would also require insurers to spend at least 88 percent of their revenue on providing medical services; the ratio would go up to 90 percent in the law's second year. Another element of the bill would require insurers to adjust premiums for a customer's age every year, rather than every five years, the current standard practice. This change is intended to make costs increase slowly and steadily each year, rather than lurching up at each interval" (Shemkus, 5/19).

The Associated Press, in a second story: In Arizona, voters Tuesday approved a temporary sales tax increase to help avoid cuts to health care benefits and other programs. "The sales tax increase will take effect June 1, raising the current state sales tax of 5.6 cents on the dollar to 6.6 cents for three years and raising a projected $918 million in the first year. A defeat for Proposition 100 would have triggered $862 million of contingency spending cuts beyond those already included in the budget to cope with the state's loss of 30 percent of its revenue" (Davenport, 5/19).

Los Angeles Times: Arizona Republican Gov. Jan Brewer surprised many with her support of the tax increase. "She and the Legislature already had slashed $2 billion from last year's budget and made Arizona the first to withdraw from a federal program to provide health insurance for children who live just above the poverty line" (Riccardi, 5/19). 

Lexington Herald-Leader: In Kentucky, a budget compromise totaling $17 billion in cuts over two years to state programs would include "less severe cuts to key areas of the budget, including K-12 education, higher education, Medicaid, state police and prosecutors and public defenders." The state House Speaker Greg Stumbo said "House Democrats have been working to alleviate some House members' concerns about those changes. The changes include making the basic health insurance plan more attractive by making the optimum plans more expensive. Stumbo said concerns about changes to state health insurance would not derail passage of the budget" (Musgrave, 5/19).

Los Angeles Times, in a separate story: "California's biggest public pension fund is likely to give California taxpayers an extra $700-million bill Wednesday to meet future obligations for retirees, whose benefits have been threatened by steep investment losses." The benefits include health insurance coverage. "Dozens of cities and counties around the state, including Los Angeles and San Diego, also are dealing with projected pension shortfalls that are eating into funds needed to pay for vital local services, including public safety and health" (Lifsher, 5/19). 

Omaha World-Herald: A vote by the Omaha, Neb., City Council Tuesday to require some retired workers to pay more for their health insurance has sparked a lawsuit from city unions. "The lawsuit, filed in U.S. District Court, came just hours after the council voted 6-0 to approve Mayor Jim Suttle's plan to charge premiums for retired police, fire and civilian employees. Mike Dowd, an attorney for the unions, said the ordinance violates labor contracts that require the city to provide health insurance for retired employees. He said that includes charging the city for the cost of that coverage." Civilian employees, not public safety workers, already have a small premium to pay. "The city now provides health benefits to nearly 1,100 former employees from the time they retire until they reach age 65 and qualify for Medicare. In most cases, the city covers 100 percent of the premiums, although some retirees pay modest premiums. Suttle proposed raising premiums as a way to save money for the financially strapped city" (O'Brien, 5/19).

The Providence Journal: In Rhode Island, UnitedHealthcare is seeking a double-digit premium rate increase for 2011. "Late Monday, United filed an application to raise premiums an average of 11.8 percent for companies with 50 or fewer employees and 15.5 percent for companies with more than 50 employees. The 15.5 percent is the largest increase requested among the three insurers — United, Blue Cross & Blue Shield of Rhode Island and Tufts Health Plan. Blue Cross and Tufts, both nonprofit corporations, filed earlier on Monday. They announced their rates and gave statements" (Salit, 5/19).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.