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NEW STUDY ON EMPLOYER PARTICIPATION IN HEALTH REFORM

The Taxpayers Foundation has just published the first comprehensive analysis of the broad scope of employer participation that is essential to the success of Massachusetts health care reform. Our report finds that employers will increase their health care spending by about $175 million a year as more employees accept employer-sponsored health insurance and as employers add new prescription drug benefits to help employees comply with the Connector's minimum creditable coverage standards.

The beauty of the Massachusetts law is that it uses a combination of individual and employer incentives and responsibilities to build on our state's historically high level of employer-sponsored coverage, increasing both the number of insured and the amount employers spend on health care by creating a strong incentive for previously uninsured employees to sign up for employer health coverage. Our study estimates that 50,000 employees and dependents who were previously uninsured will now enroll in employer coverage, increasing employer spending by about $150 million a year. Employers will spend an additional $25 million to offer employees new prescription drug benefits.

Our analysis highlights the fact that employer participation in health reform goes way beyond the so-called "fair share" provisions that have received most of the public comment and have been widely misunderstood.

The fair share contribution is specifically tied to equalizing the obligation on employers to pay for free care. It was never intended either to increase employer coverage or to help pay for reform in any significant way.

The Foundation's report comes on the heels of the Connector's announcement of new enrollment numbers that include, for the first time, uninsured residents who are signing up for unsubsidized coverage directly with the state's health plans, in addition to those joining through the Connector. Taken together, these are two more promising signs that health reform is working.

Michael J. Widmer
President, Massachusetts Taxpayers Foundation

This program aired on December 11, 2007. The audio for this program is not available.

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