Health Care Reform Law
The Commonwealth recently started to implementation of the Massachusetts Health Care Reform Law which established programs to make quality, affordable health care available to every resident. Before the law passed, nearly 500,000 Massachusetts residents were uninsured. These residents typically use emergency rooms as their primary source of care. State law requires hospitals to administer care regardless of whether or not a patient can afford it.
In the past, the Commonwealth has partially reimbursed area hospitals for these emergency room visits at an exorbitant cost to tax payers. The remaining costs have been borne by the hospitals themselves, causing cutbacks in services and staffing levels. With the cost of health care consistently rising, this system is no longer practical, much less efficient. It is my hope that the new reforms will better serve both taxpayers and healthcare providers, while at the same time provide uninsured individuals with affordable health care.
Many of my constituents have contacted my office to express their apprehension regarding these new reforms, so I will try to clear up some of the confusion and fears.
Beginning on July 1st of this year, all Massachusetts residents aged 18 and older will be required to have health insurance. By December 31st, all adults must be able to demonstrate that they have health insurance coverage. Those who can’t, will lose their personal exemption on their 2007 Massachusetts income tax return, a $219 value. This requirement has important implications for local business owners, particularly those with 11 or more employees. Indeed, the extent to which a business is affected by the new law will vary greatly depending upon its size.
To better assist both employers and employees in navigating through the new requirements, a special state agency was created. The Commonwealth Health Insurance Connector Authority is tasked with administering two separate programs designed to facilitate compliance with the legislation.
Commonwealth Care will provide subsidized health insurance plans to people whose annual income is up to 300% of the Federal Poverty Level. This is about one-fifth of the uninsured population in Massachusetts. Commonwealth Choice will assist uninsured individuals and small businesses to select from a broad range of affordable, high quality commercial plans. While insurance coverage may still be purchased through private channels, all plans must meet a minimum quality of coverage as approved by the Connector Authority.
Both individuals and small business owners should be pleased to learn that now, health insurance plans can be purchased on a pre-tax basis. On average, this component of the law will reduce the cost of health insurance to employees by more than 40%. It is estimated that private employers will save nearly 8% on their FICA taxes.
Employers who would like additional information on new business health care coverage plans, aptly named “Section 125 Plans”, and their legal obligations, should visit the Connector’s website at www.mass.gov/connector.gov. Individuals who wish to enroll in Commonwealth Care can do so at this same web address. Eligibility criteria for both employers and employees can also be found at this site.
While we have many hurdles ahead in offering and overseeing this coverage to all the citizens of the Commonwealth, I believe the state is headed in the right direction towards this goal. Please call my office with any questions you may have, or call the Commonwealth Connector directly at 1-877-623-6765.