This state’s universal health care law was the model for the federal Affordable Care Act, but so far, Massachusetts’s experience with the new national law has proved frustrating. Certainly the experience here doesn’t fully comport with President Obama’s recent assertion that the new law is “working fine.”
Bureaucratic hurdles are inevitable when attempting to reconcile local rules and practices to new federal standards. But even people who strongly support Obamacare, as many people in Massachusetts do, shouldn’t hesitate to call attention to areas where the law is unnecessarily complicated, or where local practices accomplish the same purposes in simpler ways.
So far, when it comes to Massachusetts, the federal response has been to grant grace or transition periods. But those periods don’t solve the problems, they merely delay their onset. The Obama administration’s aim should be fixing, rather than finessing, those problems.
The latest issue here is federal regulations that will force insurers to change when they set rates for small businesses and individuals. Currently, health plans submit their proposed rates, which need state approval, on a quarterly basis, three months before they are scheduled to take effect. Quarterly filing, with its relatively short lag time, lets insurers consider the latest data and cost trends as they formulate rates.
But new federal rules will require insurers to set rates on a once-a-year basis. That means health plans will have to develop rates that, in some cases, won’t take effect for 18 months. The predictable effect: Because health plans will want a cushion against the greater uncertainty of that longer period, they will seek higher rates than they otherwise would. Some estimates are that premiums will increase by an extra 1 to 2 percent as a result.
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Massachusetts Insurance Commissioner Joseph Murphy says federal Health and Human Services officials have told him they will grant Massachusetts a two-year grace period before health plans here have to move to the new schedule for small-business rates.
That action echoes HHS’s posture on the separate issue of which factors can be considered in setting rates for small businesses. First, regulators announced rules that meant Massachusetts insurers would no longer be able to consider things like the risks inherent in an industry or whether a company has a wellness program or how many employees it has when setting rates. Then, after a concerted state effort, HHS granted insurers here a three-year period over which to implement the new policy.
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The grace or transition periods are certainly better than nothing. But in both cases, they just push back a few years the disruption the new rules will cause. As a state that already has a universal health care law, Massachusetts expected a lighter touch.
“We all had hoped that because the Affordable Care Act was built on the Massachusetts model, it would be relatively easy to reconcile the two laws,” said Andrew Dreyfus, president and CEO of Blue Cross Blue Shield of Massachusetts. “In fact, it has turned out to be a real challenge. We all need to be flexible to meet that challenge.”
These frustrations aren’t an argument for repealing the federal law. Making sure everyone has health insurance remains a top national priority. Further, every big new piece of legislation has problems that need correcting.
But the bumpy experience here does argue for more flexibility in the way the law is being implemented. It shouldn’t be hard to find a rationale for such latitude, particularly when it comes to Massachusetts. In addition to a well-regarded universal health care law, this state also has a functioning merged individual and small group market. But if the Obama administration doesn’t feel it has the power to grant such flexibility, it should seek that authority from Congress.
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Massachusetts’s experience, after all, isn’t an isolated one. According to The New York Times, a number of anxious Democratic senators expressed frustration with Obamacare’s implementation at a recent meeting with White House officials.
The White House should take heed. When even supporters start raising red flags, it behooves the president and his administration to pay closer attention.