Baker: Insurance instability threatens health care


State House News Service
Friday, May 19, 2017

After the U.S. House narrowly passed legislation he describes as a “significant threat” to Massachusetts from a fiscal and coverage standpoint, Gov. Charlie Baker on Friday wrote to three U.S. Senate committees to urge them to stabilize insurance markets as they consider health care reform and avoid shifting Medicaid costs to the states.

The House bill, Baker wrote in his latest letter, would result in the loss of coverage for “thousands” of people in Massachusetts and state government would lose $1 billion in federal revenue supports beginning in 2020. “I urge the Senate not to pass any bill that threatens the loss of existing health care coverage or makes it more unaffordable for Americans,” Baker wrote.

To prevent insurance companies from dropping out of the market or raising premiums, Baker said it’s critical that Congress ensure a transition period of several years for major changes to the Affordable Care Act, the landmark law signed by President Barack Obama. And he said any federal health care bill must address “escalating pharmacy costs.”

A former health insurance executive himself, Baker said Massachusetts insurers, who are filing 2018 plan year rates imminently, could be on the hook for $63 million in unreimbursed costs for the rest of 2017 and $123 million in 2018 if federal cost sharing reduction payments (CSR) are not “resolved affirmatively.”

“This will disrupt our hard earned market stability, potentially increasing 2018 premiums drastically, causing insurers to withdraw plans and reducing access for lower income residents,” Baker wrote to Senate Finance Committee Chairman Sen. Orrin Hatch and ranking Democratic member Sen. Ron Wyden, with identical letters sent to the Senate Budget Committee and the Senate Health, Education, Labor and Pensions Committee.

The fate of the CSR subsidies hangs in a lawsuit, House v. Price, initially filed by House Republicans against the Obama administration.

Urging senators not to shift costs to the states, Baker said 31 states and the District of Columbia have decreased their uninsured rates by expanding Medicaid coverage and “should not be penalized for expanding coverage under the Affordable Care Act.” Baker also called for reforms that give states more flexibility to design Medicaid benefits, managed care delivery and pharmacy coverage.

Baker is seeking to impose a new assessment on certain employers to help the state cover its rising Medicaid costs and said in his letter that “states should have the flexibility to implement the mandate on employer responsibility, penalties, and reporting requirements in ways that work best for the employers and employees of their state.”