Washington, D.C. – A report released today found that the health reform bill adopted by the Massachusetts House of Representatives (H. 4479) would result in a net benefit to the state’s business community. According to the report, more than 18 companies would experience financial relief for each firm that would likely be subject to an assessment under the House bill.
The report, released by the consumer health organization Families USA, examined a key issue about the House bill—how it would affect the state’s businesses. The report found that the likely savings realized by companies that currently cover their employees would substantially exceed the projected costs imposed on those firms that do not cover their workers.
“The bill will not only improve health coverage, but it will also have a very positive impact on the state’s businesses,” said Ron Pollack, Executive Director of Families USA. “The bill will provide much-needed financial relief to the overwhelming majority of companies in the state that currently provide health coverage for their workers.”
The report found that there are approximately 98,000 companies in Massachusetts with about 2.7 million employees that offer health coverage to their workers. These companies would pay lower health insurance premiums if the bill were enacted.
In contrast, there are approximately 5,400 firms that have more than 10 workers (totaling about 110,000 employees) that do not offer health insurance. Under the bill, these firms would potentially be subject to increased costs—namely, an assessment of 5-7 percent of payroll.
The new costs to employers that do not currently provide coverage are projected to fall between $175 million and $356 million per year. The annual savings on health insurance premiums charged to companies that do provide health coverage are estimated to comprise between $501 million and $523 million. Those savings would be achieved through the following:
* Employers would save between $128 million and $145 million through the repeal of the insurance surcharge that funds the state’s Free Care Pool.
* Employers would save an estimated $336 million through a substantial reduction in uncompensated care that hospitals and others now furnish to the uninsured—care that is financed significantly by raising charges to the purchasers of health insurance.
* Employers would save between $37 million and $42 million through the bill’s $90 million aggregate increase in Medicaid provider reimbursement rates, which will reduce health providers’ need to recoup reimbursement shortfalls by further shifting costs to employers and others who buy health insurance.
The report found that the bill would also provide an additional benefit for some of the 64,000 Commonwealth employers with 50 or fewer employees that currently offer health coverage: Under the proposal, these companies could purchase coverage through the Commonwealth Health Insurance Connector, thereby achieving significant savings in administrative costs due to economies of scale.
Read the full report.
