February 26, 2019 by Jon Hurst, RAM President
When it comes to health care in Massachusetts, there’s good news and bad news. The good news? The state recently announced that individuals who buy health care through the Health Connector, our health care exchange, pay the second lowest premiums in the country. The bad news? According to the Massachusetts Health Policy Commission, small businesses and their employees in the state have the second highest premiums in the country.
At first blush, the disparity doesn’t make a lot of sense. After all, Massachusetts has some of the highest health care costs in the nation. But the reason for the discrepancy is straightforward enough: Small businesses are effectively subsidizing individual health care premiums in Massachusetts. Employees of small businesses are required to pay more than their fair share so individuals can pay far less.
And it’s about to get worse. Next year, small businesses in Massachusetts with 50 or fewer employees will receive no pricing adjustment for purchasing health care in bulk for their employees, their lower administrative costs, or the fact that their employees are actuarially a better risk compared to individuals. And to go along with those unaffordable premiums, most of these employees will be forced into high deductible plans, joining the nearly 60 percent small-business level already seen, which requires sharing more of the cost with their employer compared with government and big-business work settings.