Governor Patrick Signs Legislation to Reduce Health Care Costs for Small Businesses

BOSTON, Aug. 10 -- Gov. Deval Patrick, D-Mass., has issued the following news release:

Continuing his successful efforts to provide small businesses with relief from skyrocketing health care costs, Governor Deval Patrick today joined legislative leaders and small business owners to sign legislation that could save small employers up to 12 percent on insurance premiums, increase transparency among providers and insurers, and improve the quality of health care for residents across the Commonwealth. The law, which includes many of the provisions from the legislation the Governor filed in February, also makes small businesses eligible for savings on health care premiums, and will allow them to be able to pool their resources and establish cooperatives for the purpose of purchasing health insurance.

"Today's signing is a milestone in our commitment to cut health care costs for small businesses and working families," said Governor Patrick. "This helps give small businesses the breathing room they need to add jobs and brings us all closer to keeping health care as affordable as it is accessible here."

"As we continue to support individuals and families, our administration and the legislature have partnered together to deliver more affordable health care costs for small businesses," said Lieutenant Governor Timothy Murray. "Small businesses are the backbone of our economy so it is critical that we provide the right resources and tools to assist these companies."

"Small businesses are the main job producers in Massachusetts, and we need to give them the boost they need to stay open and grow as our economic recovery continues," said Senate President Therese Murray. "This Senate-led initiative is a good place to start, and will bring immediate results, but we must continue our work on long-term payment reform and cost-control measures. That will be at the top of my agenda next session, and I expect a strong commitment from everyone. Long-term reform is an absolute necessity for the future stability of health care and our economy."

"With health care premiums continuing to increase, this bill is a good step towards controlling costs to help small businesses across Massachusetts," said House Speaker Robert A. DeLeo. "As we strive to stimulate economic growth and increase employment in the Commonwealth, this new law will help the bottom line of the small businesses that help drive our state's economy."

"This legislation is an important phase of health care reform to reduce costs while promoting quality and efficiency through enhanced transparency in the marketplace," said Attorney General Martha Coakley. "The Attorney General's Office will continue to address rising health care costs to ease the burdens on consumers, businesses, and our cities and towns."

"This legislation includes many initiatives that the providers, insurers, and business communities agree will help to limit cost growth," said Health and Human Services Secretary Dr. JudyAnn Bigby.

"Small business is the engine that fuels the Massachusetts economy, and this legislation will help propel these employers more quickly through this recovery," said Secretary of Housing and Economic Development Greg Bialecki.

The new law includes the following provisions:

* Savings of up to 12 % for small businesses and individuals. Select network plans offered by carriers to small business owners and individuals must cover at least a 12% price differential between plans. The Division of Insurance (DOI) will determine the adequacy of insurer plans.

* Open enrollment for eligible individuals. Insurers must provide open enrollment periods twice a year in 2011 and once a year thereafter. This is designed to prevent individuals from purchasing coverage when expensive care is needed only to subsequently drop it.

* Rate adjustments that will reduce costs for small businesses and consumers. DOI will apply rate adjustments to address 'rate shock' fluctuations that occur when the demographics of an insured group change. DOI will apply one-year age increments to reduce impact on costs for small businesses.

* The implementation of health care quality measures. This mandates reporting by providers to the Department of Public Health (DPH) annually. A statewide committee will convene to develop the Standard Quality Measure Set, which will facilitate uniform reporting of a standard set of health care quality measures, to be used by all health providers.

* Supports wellness programs within small businesses. The Connector will coordinate with DPH to provide a small group wellness incentive program, which will expand the prevalence of employee wellness initiatives among small businesses. The program shall provide subsidies and technical assistance such as grant writing to small employers so that they implement evidence-based health and wellness programs. These programs are aimed at improving employee health, decreasing employer health costs, and increasing productivity. The Connector shall provide an annual subsidy to eligible employers, not to exceed 5% of their health care costs.

As part of his efforts to control skyrocketing health care costs, Governor Patrick has instructed the Division of Insurance to closely review rates from carriers using the Division's existing authority. Since then, and following the disapproval of 235 of 274 April 1 rate filings, the Patrick-Murray Administration has reached agreements that cover over 90 percent of small businesses and individuals -- over 720,000 people -- and provide significant savings and relief from rapidly increasing healthcare costs. Jerome Murphy, co-owner of M. Steinert and Sons located in Boston, has benefited from the Governor's work to negotiate lower premiums and attended today's bill signing ceremony at the State House.

"This bill will help small businesses which are the lifeblood of the Massachusetts economy by leveling the playing field on the purchase of insurance products," said Murphy. "The members of the Retailers Association of Massachusetts already have a self insured workers compensation group that has been very effective at managing costs and care of our employees with work-related injuries. I look forward to being able to do the same with cooperative purchasing of group health care coverage."

"Small businesses have never had a seat at the table with big business, government, insurers or providers, and consequently have been hit with unaffordable and unfair health insurance premium increases," said Jon B. Hurst, President of the Retailers Association of Massachusetts. "This landmark legislation coupled with regulatory action at the Division of Insurance sets small employers and consumers on a path towards equal rights and premium parity with big purchasers. We believe this legislation will be a model for other states and indeed for the nation under the federal health care reform law."

"Health Care for All applauds the Governor and the Legislature for passing the small business health care costs bill," said Amy Whitcomb Slemmer, the Executive Director of Health Care for All. "The final bill will provide much-needed relief to small businesses and individuals by requiring transparency in insurance rates paid to providers, and by requiring that the annual review of insurance rates by the Division of Insurance is tied to how much money health insurers spend on medical care for consumers."

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