EDITORIAL: Health reform redux

Jan. 30--It's fair to say Gov. Charlie Baker has sent, if not shock waves, then at least a jolt of electricity through the health care marketplace with reforms he outlined in his budget proposal last week. Employers and hospitals are on edge -- but it's clear some fix is in order.

The crux of the problem, as Baker sees it: Massachusetts taxpayers are spending $1 billion a year to provide health coverage to more than 300,000 people who might otherwise obtain it through their employers. Baker wants to impose a $2,000-per-employee assessment on businesses that cover fewer than 80 percent of their full-time workers. The levy would raise $300 million a year and, he says, help offset the migration from employer-based coverage to MassHealth.

Under the Massachusetts health reform law enacted in 2006, workers who had access to insurance through their employer were ineligible for MassHealth. (The law also included a smaller, "fair share" assessment on employers, since repealed.)

But the enactment of Obamacare allowed individuals to qualify for MassHealth, even if they declined insurance at work. Baker says between 300,000 and 400,000 individuals who are working, many full-time, have enrolled in MassHealth over the past two years.

That exacerbates an existing problem -- that MassHealth, which covers one in three Massachusetts residents, devours an increasing share of the state budget, now up to 40 percent, squeezing out other priorities.

Employer groups say it's not fair to have them solve a problem they didn't create, and they make a reasonable argument. Meanwhile, the other element of Baker's plan that is raising hackles is the plan to cap rates charged by hospitals. The state's highest-cost hospitals would be blocked from raising rates for at least three years. That would be good news for health plans and employers -- but the approach alarms some hospitals, who note their expenses don't stop growing.

Make no mistake -- what Baker is proposing represents true market "disruption." It empowers the state to regulate prices and burdens employers -- unexpected moves from a Republican governor.

Of course this governor happens also to be the former CEO of a health plan, with particular credibility on these issues. And Baker himself seems to be using his proposal as a starting point for discussion, acknowledging his plan "may or not be" the right way to go.

A decade ago health care stakeholders of various ideologies and party affiliations put their heads together and hammered out a reform law that was fair to all parties. They should be able to regroup and do it again.

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