Legislative Update

Chapter 58 of the Acts of 2006
An Act Promoting Access to Affordable, Quality, Accountable Health Care
Edward J. Brennan, Jr., Esq.

Key Provisions

Individual Mandate. As of July 1, 2007, all residents of Massachusetts must obtain health insurance coverage. Individuals for whom there are not affordable products available will not be penalized for not having insurance coverage. Every Massachusetts taxpayer must confirm on his/her tax return beginning in 2008 that he or she has health insurance coverage. Taxpayers will lose personal exemptions and could pay penalties up to one half the cost of health insurance if the taxpayer does not have health insurance.

Commonwealth Health Insurance Connector.    A new state authority called the Commonwealth Health Insurance Connector is created to connect individuals and small businesses with health insurance plans. The Connector allows portability of insurance as individuals move from one job to another and permits more than one employer to contribute to an employee’s health insurance premium. Individuals who are employed will be able to purchase insurance using pre-tax dollars.

Commonwealth Care Health Insurance Program.   A subsidized insurance program called Commonwealth Care Health Insurance Program is created. Individuals who earn less than 300% of the federal poverty level ($29,400) and are ineligible for Mass. Health (Medicaid) will qualify for coverage. Premiums for the program will be set on a sliding scale based on household income, and no plan offered through the program will have deductibles. The program will be operated through the Connector, and retain any employer contribution to the employee’s health insurance premium. The subsidized products must be certified by the Connector as being of high value and good quality. For childless adults who earn less than 100% of the federal poverty level ($9,600.00) per year, there will be no premiums.

Medicaid Coverage for Children. All children from families who earn less than 300% of the federal poverty level (up to $60,000 for a family of four) are eligible for Mass Health (Medicaid) Coverage.

Insurance Market Reforms. Non-and small-group market insurance laws are merged which will produce an estimated drop of 24% in non-group premium costs. HMOs will be able to offer coverage plans linked to Health Savings Accounts, reducing costs for those enrolled in such plans.

Employer Responsibility for Health Care. The law creates a “Fair Share Contribution” of $295 per full time employee per year that an employer with 11 or more employees must pay to the State if the employer does not provide health insurance for its workers. The funds collected will be used to subsidize the Commonwealth’s free care pool. In addition, a surcharge can be imposed on employers who do not provide their workers with health insurance and whose employees use the free care pool.

Medicaid Fee Increase. In recognition that Medicaid has underpaid many of its providers in recent years, the legislation includes rate relief for three years. The law allows an increase of $90 million in Medicaid fees for hospitals, community health centers and physicians for each of fiscal year 2007 (beginning July 1, 2006), 2008 and 2009 of which not less than 15% of the increase would be allocated to physicians. The Division of Health Care Finance and Policy, which sets Medicaid rates, has approved a 4.7% increase for radiology rates, effective July 6, 2006.