MA – New State Budget Establishes Fees to Counter Rising Health Care Costs

July 2017 ~

Massachusetts lawmakers recently approved an annual budget, in a 140-9 House vote, that will incorporate fees on businesses to be used to cover the state’s ever-rising health care costs.

According to summaries provided by legislative budget writers, the approved budget for 2018 will decrease spending by approximately $400 million to $500 million from spending plans previously approved by the House and Senate and takes other steps to account for a $733 million reduction in anticipated tax revenues for the 2018 fiscal year set to begin July 1^st.

Senate Ways and Means chair Karen Spilka states the proposal to rein in Medicaid costs was rejected, noting it didn’t have ‘‘necessary transparency.’’ Instead, the budget includes a plan to create a temporary employer contribution to help ease the cost of public coverage for workers.

The budget includes a two-tiered assessment on companies, designed to target companies whose workers are contributing to the state’s rising Medicaid expenses by opting for public plans instead of private coverage. The plan would build off of the existing employer medical assistance contribution and would require that employers pay $200 million more a year over the next two years.

The second tier assessment would also apply companies with six or more employees and be capped at $750 per non-disabled employee who chooses to enroll in MassHealth instead of an employer-sponsored health insurance plan.

The monies collected will be used to counter rising expenses in the state’s Medicaid program and administration expects to collect $125 million from the tier-two approach.

Source(s): WBUR; Kaiser Health News; MassLive; Boston.com; The Boston Globe;