House debates increased funding for health insurance law

By Kay Lazar, Globe Staff

Hospitals and insurers would be required to pay millions more this fiscal year for the state's landmark health insurance law under a supplemental budget bill being debated this afternoon on Beacon Hill.

Other businesses will also likely have to pay more to help close a $130 million funding gap in the two-year-old law. The administration of Governor Deval Patrick intends to seek regulatory changes that would raise an additional $33 million a year from businesses with more than 10 employees that fail to provide health insurance to their workers.

The administration and consumer groups have argued that it's fair to ask employers to contribute more because people getting subsidized insurance through the law have had their premiums and copayments increased this year.

The House bill would raise $88 million in the fiscal year that began July 1 by: seeking a $33 million assessment on reserve accounts of health insurers; levying a $20 million assessment on hospitals; and shifting $35 million from the state's Medical Security Trust Fund, which is funded by employers to cover insurance for the unemployed.

House Speaker Salvatore DiMasi said in a written statement that the House plan includes "modest changes" to the health insurance law that "strike the right balance between asking everyone involved to do more without over-burdening any one group."

A leader of the state's largest business trade group said it opposes the administration's plan to require some businesses to pay more.

"The whole premise of increasing costs on employers is that we are not paying our fair share. And we take issue with that," said Eileen McAnneny, senior vice president of government affairs for the Associated Industries of Massachusetts. "We would argue that we have done more than any stake holders in health care reform or at least as much."

Brian Rosman, research director of the consumer group, Health Care for All, said the House bill is a good compromise. "By taking a little bit from every group, no one group feels they were singled out," Rosman said.

He noted that the House version dropped a provision the governor was seeking that would have allowed the administration to raise the penalty on businesses with more than 10 employees that did not provide health insurance. The current law fines businesses $295 per year, per employee. The governor wanted to raise that amount, if there was a funding shortfall.