Employer coverage up under Massachusetts health law

Researchers argue PPACA could play out the same
By Benefitspro.com | May 13, 2013
If Massachusetts’ own health reform is any indication,
employer-sponsored health insurance will be safe under the Patient
Protection and Affordable Care Act.

In the seven years since Massachusetts enacted its universal health
care law, the number of people covered by insurance at work actually
increased, running counter to nationwide trends at the same time,
according to report Monday from consulting firm PricewaterhouseCoopers.

Opponents of President Obama’s health reform law have argued that
employers dropping health coverage for their employees will be one of
the big unintended consequences of the law that will hurt employees.

But Robert Valletta, PwC U.S. healthcare provider leader, argued that
“Massachusetts’ experience may offer clues into how health
organizations, the business community and individuals might react to
elements of the Affordable Care Act set to take effect in 2014.”

“Despite concern that the Affordable Care Act signals the end of
employer-sponsored health coverage, our analysis of the Massachusetts
experience paints a more complex picture,” Valletta said, noting that
each state and industry is different.

Employer-sponsored insurance rose about 1 percentage point in
Massachusetts while the national rate fell by 5.7 percentage points.

Researchers note the growth occurred despite the difficult economy, and at a time when premiums hit historic highs.

PwC’s Health Research Institute on Monday released the first of a
two-part series called “The Massachusetts Experience,” which examines
the real-world implications of health reform in the first state in the
nation to move forward with a broad expansion of coverage.

Massachusetts’ health law was implemented in 2006 by then-Gov. Mitt
Romney, Obama’s GOP rival in the 2012 presidential election. The law has
helped the state close the gap on uninsured residents; the Bay State
has the country’s best rate of insured individuals, with just a 4.5 percent uninsured rate, according to Gallup numbers.

President Obama has said repeatedly that he used Massachusetts’ state
health reform as a blueprint for his Patient Protection and Affordable
Care Act.

Researchers also said that employer-sponsored insurance is often financially beneficial to both employers and employees.

“Employer-sponsored coverage will continue to be a critical pillar of
the U.S. health system, and it has been an important part of employer
strategy to attract and retain talent, and promote improved health and
productivity,” said Michael Thompson, PwC U.S. human resources services
principal focused on health care.

Thompson said that health insurance benefits are unlikely to go away when PPACA goes into full effect.

“Most employers see this return on investment, alone, as a compelling reason to continue offering coverage,” he said.

According to HRI’s analysis, two key factors shaped the Massachusetts
experience: the individual mandate, which drove up demand for coverage,
and the tax implications for both employers and employees.

The second report on the Massachusetts Experience — which will take a
look at the implications for state’s hospitals, physicians and insurers
— will be released later this month.