The latest Obamacare tactic in Massachusetts: Boiling the frog slowly
Last Friday the Massachusetts Division of Insurance attempted to do right by Mass employers in requesting a demerging of the individual and small group market for healthcare. As my previous blog indicated, Massachusetts employers with up to 100 employees face significant rate increases due to the 2007 decision to merge the individual and small group markets. Under Obamacare rules, this merged market disallows rate savings to most employers, and HHS denied a waiver to continue as is.
The Mass DOI was informed on Friday April 5, 2013 by HHS that they could not demerge the markets and were expected to implement the new rating changes over a 3 year period. Unfortunately, the response the DOI received is the worst possible outcome for Mass employers with white-collar employees and/or between 50-99 covered employees, but the new rules are bad for all companies.
In what has become a predictable PPACA strategy, the Obama administration kicks the rate spikes down the road three years and mandated that Massachusetts healthcare companies spread those costs out in their increases in 2014, 2015, and 2016. The approach is a text-book non solution, start with a cold pan of water and slowly turn up the heat, the frog will never know what hit him.
The fuzzy math of this healthcare bill has now directly hurt the Massachusetts health care system and it’s employers.
About the Author
Christopher Nadeau is a Principal at William Gallagher Associates and head of the Employee Benefits Group. He counsels his department to develop and redesign employee benefits programs to match the corporate philosophy, long-term needs and objectives of their clients. He is also an industry leader on Healthcare reform and the cost impact and administrative burden on employers.