"Flexibility is Vital to the Success of Health Care Reform" by Jon Hurst

The recent loosening of the affordability standards by the Connector for our residents was an important step and acknowledgement that we need to go slow on this unique reform. The long term economic and political viability of the reform demands that we be patient, flexible and understanding as to the financial and personal needs of everyone affected.

It is difficult for many of us with generous health insurance coverage to be able to fully relate to the situation of those not currently insured. Those who cannot afford to make that investment need to have help and time to make the adjustment. There are also those that can afford coverage, yet do not take insurance because they view themselves as healthy and even “self-insured.” Understanding and flexibility should be granted to this large group of residents, most of which likely do not yet fully comprehend their coming responsibility under the law.

The reaction from the group of residents that currently decline coverage despite its affordability is going to be very interesting. Will they view the individual mandate as overly intrusive or as investment that they should have been making all along? I suspect there will be plenty of people in both camps. Flexibility, choice and lower costs are the three factors necessary to prevent a backlash from this segment of the population, many of whom are likely firm believers in - “the government can’t tell me what to do.”

The health care reform debate centered around two issues; de-populating the uncompensated care pool; and saving important federal Medicaid dollars. While those two objectives were met in an innovative fashion, too little of the debate was about lowering overall health care costs, which is not surprising given the massive lobbying effort put forth by the receivers of our health care dollars - the insurers, hospitals and other product and service providers.

The lobbying efforts of the health care establishment have continued during the implementation phase. It should be no surprise to anyone that the big biotech and pharmaceutical industries have pushed—successfully—for mandated prescription drug benefits. This is a position that was also supported by advocates of subsidized plans in order to ensure coverage is comparable across the board for all ranges of consumers. But some healthy individuals facing this mandate in January of 2009 may question sending more premium dollars to their insurer for a benefit that they may rarely if ever use.

Likewise, insurance plan deductibles have been limited. A “Mom & Pop” member of our association recently told me how his small firm saved a whopping $25,000 per year in health insurance costs by going to a $5000 deductible plan for employees. Those overall savings occurred after the store fully reimbursed 100% of the out of pocket deductible for their employees! The difference is that the small business and their employees were better able to manage their health care costs, and the store enhanced their own bottom line as opposed to that of their insurer. Unfortunately, this plan and innovative cost control approach may no longer qualify in the future under “minimum credible coverage.”

As the reforms are implemented, we must make renewed priorities to lower costs for all consumers, to seek insurance premium fairness for the smallest of purchasers and to keep important cost control decisions in the hands of the payers, not the receivers of our health care dollars.

Jon Hurst is President of The Retailers Association of Massachusetts, a statewide employer organization representing 3,000 members.