The most obvious question in the wake of federal health reform is a simple one: how will it affect Massachusetts? Whether you are talking about yourself, your business or the Commonwealth, the news is positive as Massachusetts looks to make even more strides to complement the momentum we’ve enjoyed since 2006.
These new reforms will increase federal funding for the state’s Medicaid and Commonwealth Care programs by nearly $5 billion between 2014 and 2020 and allow us to expand subsidized coverage in 2014. No longer will Massachusetts be required to seek a Medicaid waiver every three years in order to sustain federal financial support for near-universal coverage. In addition, there will be expanded funding for community health centers, assistance with drug prescription costs for seniors, and tax credits for small employers.
Since Massachusetts has been the model for many of the major principles that encompass federal reform and the undisputed national leader in insuring our residents, the change we see here will not be as dramatic as the rest of the nation. But there will be change, some of it now and more later as the rest of the country ramps up and creates insurance exchanges much like ours here at the Health Connector.
This year, specifically six months from now, adult children can be included in their parents’ health plans until age 26. Our 2006 landmark legislation recognized the problem young adults face affording health care. We already allow dependents to stay on their parents’ plan for two years after losing dependency or until age 26, whichever comes first. We also created affordable Young Adult Plans tailored to meet their health needs. The new federal plan will further reduce the financial burden for young adults and the anxiety for their parents.
This year small business owners will also reap immediate benefits. Beginning in 2010, employers with 25 or fewer employees and average annual wages of less than $50,000 per employee can qualify for tax credits if they contribute at least 50 percent toward the their employees’ health premiums. From 2010 to 2013, this tax credit will offset up to 35 percent of the employer’s contribution (25 percent for non-profits), depending on the company’s size and average annual wage. In 2014, the maximum credit will increase to 50 percent if that coverage is purchased through the Connector.
In 2014, eligibility for subsidized insurance will expand. Those on our subsidized Commonwealth Care program will not see any change in the near-term. In 2014, new federal subsidies will take effect that expand coverage to include individuals and families who do not have access to affordable employer-sponsored insurance and earn up to 400 percent of the federal poverty level. That is currently around $43,000 for an individual and $88,000 for a family of four. Our current threshold is lower, at about $32,000 for an individual and $66,000 for a family of four.
For Commonwealth Choice members, the national legislation was written to avoid disruptions to your existing coverage. Your coverage will continue without change.
There will be federal penalties for individuals and businesses who do not comply with the new law in 2014. Our state lawmakers will have to decide whether to maintain current state penalties, modify them, or eliminate them in the next few years. Relatively few taxpayers and businesses have been penalized under state reform since compliance is so high here.
Jon Kingsdale is executive director of the Massachusetts Health Connector, the state agency spearheading the drive for universal health coverage.