By Matt Murphy
State House News Service
---- — BOSTON — The state will have to shoulder the cost of at least three new mandated benefits approved last year by the Legislature for residents insured through the state’s health exchange, according to an analysis of the federal Affordable Care Act that is being challenged by the Patrick administration.
Beginning in 2014, the state will be required to defray the costs of state-mandated benefits that are not included as essential health benefits in subsidized Qualified Health Plans offered by the Health Insurance Connector under the federal health reform law.
Based on an analysis of the ACA done by Foley Hoag for a group of business organizations, state mandates adopted after Dec. 31, 2011 would not be considered essential health benefits for 2014 or 2015. That would cover new requirements passed by the House and Senate last year requiring insurers to cover hearing aids, treatment for cleft palates or lips and possibly oral cancer therapy — all initiatives that supporters say are needed by patients.
The group of business organizations wrote a letter to Gov. Deval Patrick, House Speaker Robert DeLeo and Senate President Therese Murray on Monday urging the leaders to proceed cautiously when considering any new health care mandates over the next two years, mindful of the new cost to the state.
“Given the fiscal climate and the uncertainty the state faces due to the impact of deficit reduction efforts at the federal level, we would caution against passing any additional mandates this session to avoid further costs imposed on the state budget,” the groups wrote.
The letter was signed by executives at the Retailers Association of Massachusetts, Associated Industries of Massachusetts, the South Shore Chamber of Commerce, Affiliated Chambers of Commerce of Greater Springfield, the state chapter of the National Federation of Independent Business, the Massachusetts Association of Health Underwriters, Blue Cross Blue Shield of Massachusetts and the Massachusetts Association of Health Plans.
The group is also asking that mandated benefit bills filed this session be reviewed by the new Center for Health Information Analysis for their cost to the state based on the new criteria of the ACA.
“While many of these mandated benefits bills may have been well-intentioned, mandates passed during the 2013-2014 session will increase costs for the state and Massachusetts businesses, particularly small- and medium-sized employers who do not purchase a (qualified health plan), and runs counter to the cost containment goals of the state’s Payment Reform Law,” the letter to Democratic leaders argued.
Former Commonwealth Health Connector Director Glen Shor – now the governor’s budget chief – and Insurance Commissioner Joseph Murphy wrote to the Centers for Medicare and Medicaid Services in December requesting a “narrower interpretation” of the regulation to limit the financial impact on Massachusetts.
Shor and Murphy argued that states have the ability to offer qualified health plans with benefits beyond those determined essential, and therefore the state should only be required to pay for those benefits sold in qualified plans to people taking advantage of premium tax credits offered through the ACA.
“We respectfully submit that any interpretation beyond that unfairly burdens states with defraying the cost of benefits generally codified into state law as a result of a state’s representative legislative process,” Shor and Murphy wrote.