Human Resources: Whitepaper - The Changing Healthcare Landscape: Big Changes Brewing?

How many uninsured are there in the United States? In your state?

According to U.S. Census Bureau surveys approximately 15.5% of Americans are uninsured. If you live in California the rate is estimated at 18.4%, Texas 25%, New York 15%, and New Mexico 21.4. Minnesota had the lowest reported rate of nearly 9%. Businesses and government have been overwhelmed with trying to keep us insured.

While there seems little chance that a solution to America´s healthcare crisis will come out of the federal government anytime soon, the states have been responding. Recently Maryland passed legislation (the "Wal-Mart bill") requiring that large employers spend a certain percentage of payroll on health insurance. Employers who don´t hit these percentages would be required to pay into Maryland´s Medicaid fund. At least 30 other states are considering similar legislation some of whom would require much smaller organizations to comply. Kansas, Maine, and Minnesota are exploring ways to help small businesses provide insurance. Illinois and Tennessee are focusing on ways to provide more coverage to children. But the boldest plan is coming out of Massachusetts where the state has passed legislation that would bring health insurance to nearly everyone in the state.

What´s happening in Massachusetts? Are they on to something?

Massachusetts legislators overwhelmingly approved a bill that would provide for nearly universal health coverage for its citizens. The governor signed the bill on April 12, 2006 with just a few changes. All Massachusetts residents would be required to have health insurance by July 1, 2007. The state would be the first to require its citizens to have coverage.

Is this government or state run medical care?

No. Private health insurance and Medicaid (MassHealth) will still form the backbone of coverage. The program uses a combination of penalties and subsidies to bring insurance to all.

Who will be affected?

According to the legislature poor people will receive free or significantly subsidized coverage, individuals who could afford insurance but don´t get it will be penalized until they do so, and those who already have insurance would see a small decrease in premium costs.

What are some of the key features?

Small businesses & individuals. The bill merges non- and small group markets. The legislation will create the "Commonwealth Health Insurance Connector," a government entity whose job it will be to connect individuals and small businesses with health insurance products. Lower cost policies for young adults (19-26) will also be offered.
Subsidized insurance. A subsidized insurance program was created for those earning less than 3 times the Federal Poverty Level (FPL-$9600/year) but don´t qualify for Medicaid. Premiums for this insurance will be on a sliding scale and there will be no deductibles.
Individuals are penalized for not having insurance. Residents will have to confirm that they have insurance on their 2008 state income tax forms. Those who don´t have coverage will lose their 2007 personal tax exemption and then will pay increasing penalties that could amount to half of what an affordable health care premium would cost.
Employer "Fair Share & Free Rider" charges. Employers with 11 or more employees who do not provide health insurance for their employees must pay a "Fair Share Contribution." A "Free Rider Surcharge" would also be imposed on employers who don´t provide insurance and whose employees use free care.
Must offer flexible spending plans. Employers of 10 or more will be required to offer Section 125 "cafeteria plans" which allow employees to pay for insurance, out-of-pocket medical care, and daycare on a pre-tax basis.

For more information on the Massachusetts plan go to: www.mass.gov and look for the Health Care Access and Affordability Conference Report.

From HRN Management Group: contact them at www.hrnonline.com.