Why Massachusetts Small Business Opposes the House and Senate Healthcare Bills

Date: August 01, 2018

Massachusetts residents pay the some of highest healthcare costs in the nation, so one would expect that any new healthcare legislation would be focused on lowering these expenses. However, the bills considered in the Senate and House this session would have only increased costs for small business owners, their employees, and consumers, according to business groups.

The crux of the issue is how best to fund the state’s community hospitals, many of which are struggling to stay afloat. The House bill would have impose a one-time fee on large hospitals and insurers in order to provide three years of funding to community hospitals and health centers. The Senate bill would have limited the variation in what insurers are allowed to pay hospitals for services as well as penalize high-spending hospitals. A coalition of Massachusetts business groups—including NFIB, the Associated Industries of Massachusetts and the Retailers Association of Massachusetts—contend that both of these approaches are flawed and will drive up premiums for employers and consumers.

There were good components, too—such as limits placed on surprise out-of-network billing, regulations on facility fees, increased transparency for drug pricing, and expanded telemedicine access—but these were overshadowed by the negative parts of the bill.

In Boston Business Journal op-ed, NFIB/MA State Director Chris Carlozzi and CEO of Hollister Insurance Brokerage Matt Hollister explained why cost-control is so important to small business owners: “Rising health care costs impact an employer’s ability to offer raises and other benefits to workers and limit the ability to grow companies and hire additional staff. Rising costs also make it harder for Massachusetts employers to compete for talent with employers from other states; those employers can offer higher wages because health care costs are not eating into their bottom lines.”

Carlozzi and Hollister recommend that any attempts to minimize price variation be done cost-neutrally: “For instance, if hospitals are paid a statutory minimum amount, it must be linked with a rate ceiling so that any increase for low-paid providers is offset by cost savings accrued from the highest-paid providers. In this way, we can be assured that costs will not increase for employers and consumers. A target growth cap like that in the Senate proposal is not sufficient in this regard. The conferees must also not include language granting all hospitals a rate increase if one hospital gets a rate increase, and they must close loopholes to ensure that hospitals in wealthy systems aren’t unjustly enriched by these new provisions.

“Any final proposal must promote competition and not destabilize our health plans or others in the health sector.”

These bills did not advance through the legislature on the final day of session because the Senate and House were unable to work out a reasonable compromise. NFIB will continue to advocate for lower healthcare expenses and urge elected officials to ensure future legislation includes lowering costs for both small businesses and their workers. 

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