SalemNews.com, Salem, MA

July 3, 2013

Chamber seeks waivers to federal law

Businesses concerned about health care costs

By Jonathan Phelps
Staff writer

---- — In owning C.P. Berry Construction Co. for the past 30 years, Alan Berry has noticed a trend that is cause for concern for many businesses.

“The cost of health insurance over the past 15 years keeps going up and up and up,” he said.

Now, there are concerns that as universal healthcare across the country is rolled out over the next few years under the Affordable Care Act, also known as “Obamacare,” the cost of health insurance for businesses could increase even more.

Berry said the state currently has a stable and working universal healthcare system, which was implemented in 2006 and served as a model for the federal program.

“Now, they are going to impose a federal system where the cost will go up and provide less,” Berry said.

With other business owners expressing similar concerns, the North Shore Chamber of Commerce is advocating for several waivers to the federal law that chamber leaders say would allow the state to keep important pieces of its own health care reform in effect.

William Tinti, legal counsel for the chamber, said the chamber voted last week to seek five waivers from various provisions of the Affordable Care Act to lessen what they say will be a negative impact on businesses.

“We are not asking to repeal Obamacare,” he said. “We are trying to preserve a system that is working here.”

Some business groups estimate premiums under the federal law could increase 20 percent or more, which could affect both individuals and businesses, Tinti said. The chamber represents close to 1,000 businesses across 25 communities, including C.P. Berry Construction.

“It could be the difference between success and failure for some businesses,” Tinti said. “It is a big hit because health insurance cost is a major expense.”

The Affordable Care Act is a vast law, Tinti said, that could impact individuals, business owners, health insurers and medical device companies as it is rolled out over the next few years.

“Health care is the No. 1 challenge for any business,” said Brian Cranney, owner of Cranney Companies. “It just has been double digit crazy.”

He said he doesn’t understand why the federal law needs to be instituted in a state that already has a working universal healthcare system. He agreed with Berry that the new law would drive up the cost and provide less than Massachusetts’ current system.

“I’m all about everyone getting health care,” Cranney said. “But if the cost goes up 10 or 15 percent under Obamacare I don’t see the value. We didn’t have it before and things seemed to work fine here in Massachusetts. It is making government bigger and I’ve never found efficiency in that.”

Robert Bradford, president of the chamber, said the state already has 98 percent of its population covered with health insurance.

“This just creates an unfair burden on the businesses in Massachusetts in beginning to adhere to a new set of rules that were developed based on the success of our system,” Bradford said.

The chamber is seeking waivers for the following:

Rating factors: A mandated change under the Affordable Care Act that requires the state’s current 11 rating factors to establish health insurance premiums to be reduced to four.

Tinti said this would be the major change to drive up costs.

“Each of those rating factors impact the premium,” Tinti said. “The fewer factors you have generally means a higher premium.”

Annual rate filing: Rate filings will be changed from a quarterly to annual basis.

Under the federal law, insurance companies will have to project its risk over the entire year, Tinti said, which will likely cost more for customers because the health care providers will budget on the higher end of their projections.

“List bill” calculation: This change means health care providers will make new premium calculations for a company whenever the business adds a new employee, including a calculation for each member of a family covered. Under this change, the business will have to foot the bill for any increase over the original premium.

Expansion of small group market: Mandates that businesses with 50 to 99 employees be merged into a small-business class by 2016.

Tinti said small businesses are currently classified as 50 employees and under. Companies with 51 to 99 employees will lose some of their negotiating power, which will likely mean costs will increase.

Change to state rate review process: Changes that would impact on the present rate review process. This relates more to government oversight and capping of premium increases.

“We have a state review system that is working,” Tinti said. “Now we have to rip it up and throw it away? Why?”

Tinti said the chamber is working with state and federal elected officials to try to get the waivers passed, which are allowed under the law.

“If the waivers are granted by the federal government, there will be minimal changes to how companies are operating from the standpoint and cost of healthcare,” he said.

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Staff writer Jonathan Phelps can be reached at 978-338-2527 or by email at jphelps@salemnews.com. Follow him on Twitter at JPhelps_SN.