Some say Blue Cross plans to hurt health revamp
Lower contributions by firms could leave more without policies
Small employers that are only willing to pay one-third of their workers' healthcare insurance premiums can now offer policies through Blue Cross and Blue Shield of Massachusetts. Previously, the state's largest health insurer only offered coverage to companies that contributed at least one-half of premium costs.
The change, which went into effect July 1, has reignited debate over how much employers should contribute to healthcare premiums. Healthcare activists and state legislators who helped craft Massachusetts' healthcare reform law are worried the move by Blue Cross, which has about 3 million members, could lead to fewer workers with healthcare coverage.
"This has the potential to unravel some of the progress we've been making in reducing the number of uninsured," said state Senator Richard T. Moore , Democrat of Uxbridge, who played a key role in forging the healthcare reform law, which is intended to extend coverage to all state residents
Moore said that as employers shift more of the cost of healthcare insurance to workers, fewer will be able to afford coverage.
Employer contributions to employee health plans became a major issue last summer when the Romney administration was drafting final rules for the implementation of the reform law. Last summer, the Division of Health Care Finance and Policy decided companies would have to contribute a minimum of 33 percent of the cost of individual coverage to avoid a $295 per employee annual surcharge.
Moore and some advocates complained at the time the bar had been set too low. They cited studies by insurers and legislators that showed Massachusetts companies that provide employee health insurance contribute about 75 percent of premium costs. If companies could avoid the $295 surcharge with a contribution of only 33 percent, critics of the regulation said, they would tend to pay less toward their employees' insurance.
Yesterday, Moore wrote to Sarah Iselin , commissioner of the healthcare finance division, asking her to issue emergency regulations that would increase the minimum contribution to employee premiums to 50 percent. He called the 33 percent threshold a "glaring loophole" that had been "inherited" from the Romney administration.
In a statement, Iselin said the state is "carefully monitoring" the implementation of the healthcare reform law. "Over time, we will make adjustments where they are needed," she added.
Blue Cross spokesman Chris Murphy said the company changed the minimum employer contribution to premiums in response to inquiries from small companies. The insurer said its new lower contribution standard only applies to companies with 50 or fewer employees. Large firms still have to pay at least 50 percent of premiums, Blue Cross said.
"We actually have a lot of small businesses contacting us, trying to provide insurance for their employees, but they can't meet the 50 percent contribution requirement," said Murphy. "Now more employers will get to offer health insurance to employees and be more competitive in the market, and the employee gets coverage that's less expensive than if they were buying insurance individually."
But John E. McDonough, the executive director of Health Care for All, an advocacy group, said the change sets a "bad precedent."
"We hope Blue Cross officials will reconsider their action," he said.
McDonough said it will now be easier for companies to provide "degraded" healthcare coverage. He is also concerned other insurers will copy Blue Cross's new policy.
Sharon Torgerson , a spokeswoman for Harvard Pilgrim Health Care, said the state's second largest insurer still requires a 50 percent minimum employer contribution. But "Blue Cross's decision has forced us to reconsider our existing policy," she said.
Tufts Health Plan, the third-largest insurer, also requires a 50 percent minimum employer contribution. "Our minimum contribution standards are designed to keep premium costs as low as possible while maintaining access to healthcare," said Patti Embry-Tautenhan , a Tufts spokeswoman.
Jeffrey Krasner can be reached at krasner@globe.com. 