BOSTON (AP) - Gov. Charlie Baker’s top budget official told lawmakers Thursday the administration is open to compromise with business leaders who object to proposed fees on some employers who do not offer health insurance benefits to their workers.
The proposal is contained in the governor’s $40.5 billion state budget plan for the fiscal year that starts July 1 and is part of a strategy to gain control over surging costs in the state’s Medicaid program known as MassHealth.
Secretary of Administration and Finance Kristen Lepore, testifying at a budget hearing held by the House and Senate Ways and Means Committees, said nearly 2 million people - or about 30 percent of Massachusetts residents - are enrolled in MassHealth.
Medicaid, she said, eats up 40 percent of the entire state budget, squeezing resources available for all other programs.
The increase in Medicaid enrollment is being driven in part by the apparent migration of many working residents from private health coverage to the government insurance program that has traditionally served the poor and disabled, according to the Baker administration.
While the overall percentage of insured Massachusetts residents has held steady in recent years, commercial coverage has declined by 7 percent while there’s been a corresponding increase in MassHealth.
“We aren’t saying that this is a one-for-one exchange, but clearly there is a phenomenon here that can’t be ignored,” Lepore said.
“Something has to be done,” she later added.
The governor’s plan, aimed at raising about $300 million to offset rising Medicaid costs, would impose a $2,000 per worker assessment on companies that have more than 10 employees but do not offer a minimum level of health insurance benefits.
Yet even companies that do offer adequate plans would not fully escape the fees unless at least 80 percent of their workers accepted the benefit provided. Federal law allows workers to enroll in MassHealth even if they’re offered coverage by their employers, and some workers choose the government plan because it includes benefits not offered under employer-issued plans.
Several leading business groups have split on the issue with Baker, a Republican, arguing the proposed employer contribution amounts to an unfair shift in costs.
“The important point is that the governor’s sweeping proposal goes far beyond targeting employers who offer no health insurance, and instead penalizes employers who already offer high-quality insurance coverage to their employees,” Associated Industries of Massachusetts said in a statement after the proposal was introduced.
Lepore acknowledged the business community’s concerns.
“I think that we have always demonstrated that we are open to other suggestions, if someone has a better idea on how we can accomplish this,” she said after testifying, though she did not speculate on what a possible compromise might entail.
She noted the administration’s plan also includes several provisions designed to make it more affordable for companies to offer health insurance benefits.
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