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Providers’ Council, members testify on insurance bills

Providers' Council testimony on health insurance billsOn Tuesday, October 3, Providers' Council President/CEO Michael Weekes and HMEA President/CEO Michael Moloney (a Council member) testified in favor of two bills that could enable human service workers to access more affordable health care.

The bills, SB532 and SB534 each advance potential opportunities for Massachusetts to make it possible to reduce health insurance costs to providers of human services, without any increased cost to the Commonwealth. SB532 would enable human service employees to access potentially more affordable coverage through the Health Connector, while SB534 would enable the Providers' Council to leverage full purchasing power of its membership to potentially secure more favorable rates for participating members.

Learn more by reading the Council's testimony:

(Jump to our testimony on SB534)

(See testimony from members: HMEA President/CEO Michael Moloney or Roxbury Youthworks Executive Director Mia Alvarado)

Providers' Council Testimony in support of Senate Bill 532 to enable human service workers to seek coverage through the Health Connector

October 3, 2011

To: Senator Richard T. Moore, Chair, Joint Committee on Health Care Financing

Representative Steven M. Walsh, Chair, Joint Committee on Health Care Financing

From: Michael Weekes, President/CEO

Re: Testimony in support of Senate Bill 532

Chairman Moore, Chairman Walsh and members of the Joint Committee on Health Care Financing, thank you for the opportunity to submit testimony on Senate Bill 532, revenue-neutral legislation that would allow human services employees to seek insurance through the state's Health Insurance Connector Authority even if their employer offers health insurance. 

The Providers' Council is a statewide association of home- and community-based human services organizations that provide an array of services to one in ten Massachusetts residents on behalf of the Commonwealth. The Council is the state's largest human services association, and we are in support of legislation, including this bill, that would make it possible for low-paid direct care workers to have affordable health insurance options.

Health insurance and the human services sector

As the cost of health insurance continues to rise across the state, affording coverage has become increasingly difficult for our sector's low-paid workforce. Due to fixed state contracts human service organizations hold with the state and the absence of a Salary Reserve, these direct care workers who help Massachusetts' most vulnerable on behalf of the Commonwealth have not received any type of annualized salary increase from the state since FY 2008. 

While their salaries have remained stagnant, the cost of health insurance continues to increase exponentially every year. The Providers' Council, therefore, is seeking solutions to help these low-paid direct care workers have access to affordable health insurance options. By allowing these employees access to the Commonwealth Health Insurance Connector Authority, the state would provide individuals it has charged with caring for our society's most vulnerable residents appropriate care for themselves.

This bill would amend the definition of "eligible individual" in Chapter 176 J to include the employees of social service programs as defined in section 1 of Chapter 118 G so that they can seek Connector coverage. This would allow workers to have affordable health care options.

Data and stories from our sector

We have continually heard from our members that generating and maintaining affordable health insurance options is a priority for organizations and employees alike. While most human service employers do offer group health insurance, the market rates are often prohibitive to workers who make about $12 per hour. And because health insurance is offered, low-paid workers are ineligible to seek coverage through the Connector. 

Additionally, the cost of health insurance continues to rise for many of our members. The average weighted base insurance rate increases for small-group health insurance last year were between 9.4 percent (Neighborhood Health Plan) and 25.2 percent (Fallon). Other carriers also had extremely high increases - 18.7 percent for Health New England, 17.6 percent for BCBS HMO Blue and 16.1 percent for Tufts. Increases were slightly down for 2011, but many of our members still absorbed increases of over 8 percent with their carriers (Neighborhood, Fallon, BCBS HMO Blue, Tufts, Harvard-Pilgrim and UnitedHealthcare of New England). 

Some of our members also provided average costs for their individual and family plans. One member's monthly average payment for an individual was $619 and for a family was $1,652. Another's monthly average payment for an individual was $507 and for a family was $1,331. The Connector, meanwhile, has Bronze plans for as low as $240/month and Gold plans for as low as $417/month. For a family, plans could range from as low as $746/month for Bronze to $1,295/month for Gold (cost of all plans fluctuates based on age, location and family size - these figures are for illustrative purposes).

These statistics are startling, but the stories behind them are even scarier - and really illustrate why we need alternative health care options for low-paid direct care workers who cannot absorb high-percentage increases year after year. Consider but a few examples from our sector where access to the Connector could greatly benefit our workforce:

  1. One of our members saw health insurance costs increase by more than $650,000 between 2008 and 2011. A typical direct care worker in the organization brings home about $18,750/year or $1,562/month. Living expenses - or food, rent, utilities, telephone and car costs - total about $1,540, leaving $22/month for any other expenses - INCLUDING health care premiums.
  2. Another organization saw a proposed health insurance increase of about 34 percent between 2010 and 2011, which would have cost the agency more than $1 million. In an effort to contain cost, the agency added a $1,000 deductible for employees, and it was able to keep the increase to 16 percent - still far larger than desired. The agency needed to make the change because it received no additional money in its state contracts to help offset the costs. Employees feel burdened to buy mandated care that is increasingly unaffordable, as caregivers' wages remain stagnant.
  3. One outreach worker at a human services organization has four children, and because of rising costs, she recently had to move her family into her parents' house. "It makes me feel like less of a mother that I can't provide for them," she said. She cannot afford health insurance, and the family only receives benefits because her husband is on active duty. When that ends, she is unsure of how they will afford health insurance. 

Sadly, these stories are not unique. We work with many human services organizations and direct care workers who have stories that are far too similar. The rising cost of health insurance is causing catastrophic problems across Massachusetts, and is especially concerning in our sector. 

Access to the Commonwealth Health Insurance Connector Authority

Through this legislation, should it be passed, our low-paid direct care workers would be able to seek coverage through the Commonwealth Health Insurance Connector Authority - but employees and organizations would still pay the cost of health insurance. Because our members and human services employees are willing to pay the lower cost of the health insurance, this ensures that this bill will have no fiscal impact on Massachusetts.

The state Senate, during its budget deliberations, included language that would have allowed human service providers to offer workers making $40,000 or less access to a new plan that would have been developed by the Commonwealth Health Insurance Connector Authority. The language, then known as Section 145O of Senate Bill 1920, would have:

  • Allowed employees to access the Connector products at no new cost to the state.
  • Helped the state's human services sector control the rising health care costs for our lowest-paid workers, many of them whom may be a paycheck away from becoming a client of a human service agency themselves. The bill would have helped create a dedicated and healthier workforce.

Unfortunately, this proposal was not included in the final Conference Committee budget. The Council feels that Connector access, however, is still one way in which the state can help bring some health insurance cost relief to our state's low-paid direct care workers. 

We know this isn't a silver bullet solution, and the Providers' Council continues to seek several options for relief. The proposal would greatly benefit low-paid employees by allowing them access to the state Health Insurance Connector Authority; the bill would benefit many of our sector's workers who are among the lowest paid employees in the Commonwealth. This bill has the potential to make a big impact for those who need it the most.

Conclusion

Allowing low-paid human services workers to access the lower-cost health insurance plans of the Commonwealth Health Insurance Connector is a win-win-win proposal that benefits employees, agencies and the state. 

  • Employees receive a high-quality - but lower cost - health insurance product.
  • Employers - who have had no choice but to pass their high-percentage increases onto employees or create a large deductible - now increase affordability for their dedicated staff. This will help them retain experienced staff who might otherwise be forced to leave the human services sector. Additionally, employers can reallocate dollars from insurance carriers to direct service programming.
  • Residents of the Commonwealth benefit from having a healthier workforce that cares for their friends, family and neighbors - and they benefit without being asked to pay higher taxes as this bill has no measurable fiscal impact on the Commonwealth.

We ask for your favorable consideration of Senate Bill 532. The benefits of the bill are immense, and the bill requires no additional state appropriation. We would be happy to discuss this bill with you more in the future. Thank you for your time.

(Jump to top to see testimony for 532) 

Providers' Council Testimony in suppport of Senate Bill 534 to enable members of the Council to purchase health insurance in a group.

October 3, 2011

To: Senator Richard T. Moore, Chair, Joint Committee on Health Care Financing

Representative Steven M. Walsh, Chair, Joint Committee on Health Care Financing

From: Michael Weekes, President/CEO

Re: Testimony in support of Senate Bill 534

Chairman Moore, Chairman Walsh and members of the Joint Committee on Health Care Financing, thank you for the opportunity to submit testimony on Senate Bill 534, legislation that would allow the Providers' Council to create an insurance buying cooperative and allow human services organizations of any size to join the cooperative in an effort to create more favorable health insurance rates for the human services sector. 

The Providers' Council is a statewide association of home- and community-based human services organizations that provide an array of services to one in ten Massachusetts residents. The Council is the state's largest human services association, and we are in support of legislation, including this bill, that would make it possible for low-paid direct care workers to better afford health insurance.

Health insurance and the human services sector

As the cost of health insurance continues to rise across the state, affording coverage has become increasingly difficult for our sector's low-paid workforce. Due to fixed state contracts human service providers hold with the state, these direct support professionals who care for Massachusetts' most vulnerable on behalf of the Commonwealth have not received any type of annualized salary increase from the state since FY 2008. 

While their salaries have remained stagnant, the cost of health insurance continues to increase exponentially every year. The Providers' Council, therefore, is seeking solutions to help these low-paid direct care workers have access to affordable health insurance options. One way we are seeking to do this is by asking the state to allow the Providers' Council - the state's largest human services membership organization, which has been in operation for more than 35 years - to aggregate human services organizations into a larger insurance buying cooperative. We feel that with human services organizations joining together in a buying cooperative, insurance carriers will be able to offer our group better plan options and rates while limiting large percentage increases from year to year.

This bill would deem the Council to be a "qualified association" and an approved "small business group purchasing cooperative," both as defined in section 1 of Chapter 176 J. The Council would be enabled to procure health care coverage for qualified association members subject only to the provisions of subsections (d) and (e) of section 12 of Chapter 176 J and section 13 of Chapter 176 J, and the Council would be able to procure health insurance for providers of any size.

Current insurance products managed by the Providers' Council

The Providers' Council is experienced at managing insurance products for its membership, and has done so effectively since 1978. 

  • We began offering Property & Casualty insurance to members through Palmer Goddell, a broker later acquired by TD Insurance, in 1978. In total, 39 member agencies with cumulative annual revenues of about $410 million obtain P&C coverage through this partnership.
  • Our most popular product continues to be our Delta Dental insurance, which covers more than 5,500 individuals and has experienced a two-year rate hold for all participants. Members continued to stay with the program, as the Council and its partners are able to minimize yearly increases or eliminate them completely.
  • Just last year, we began a discounted home and auto insurance program for members' employees through Commerce Insurance. While the program is slightly more than a year old, it is already being actively promoted to 14 agencies with a potential enrollment of nearly 10,000. 
  • Lastly, the Council offers many other employer-sponsored benefits through our longstanding relationship with TD Insurance. We offer:
    • A life insurance program;
    • A short-term and a long-term disability program; and
    • A vision coverage program that covers employees across 50 organizations. 

Reasons this bill is critical for our sector

We have continually heard from our members that generating and maintaining affordable health insurance options is a priority for organizations and employees alike. Double-digit insurance increases - coupled with level-funded contracts - leave many members to reduce the employer share of insurance, passing cost onto the employees. With employers facing increases of 10 to 30 percent, the increase in cost is financially destabilizing for providers of all sizes. After payroll, health insurance is the largest expense for providers, and it has truly become a "budget buster."

Additional health insurance rate increases and continued level- or reduced-state funding will force our community-based human service providers to cut important services from our communities and jobs from our workforce. Given that the human services sector exists to provide services mandated by the Legislature, it is in the best interest of the state to make affordable health care available to people who serve the most vulnerable members of the Commonwealth.

Our current efforts to serve as an aggregator

Most human service employers currently offer health insurance, but if the Council is able to aggregate human services organizations into a larger pool, we could obtain more favorable rates and receive smaller year-to-year increases since we would have a larger, more stable pool of employees. For example, the Group Insurance Commission - which covers 185,000 subscribers and more than 350,000 individuals - was able to negotiate an increase on its health plans averaging only 2.4 percent, far less than the 6.4 percent average rise in premiums nationally for employer-sponsored plans and the 8 percent increase estimated in our sector.

As the Providers' Council hopes to become an aggregator for human service providers, we have submitted paperwork to the state's Division of Insurance and have been approved as a Qualified Association. We also submitted an application to be a Certified Group Purchasing Cooperative by the August 15 deadline, and we are awaiting the decision of the Department of Insurance. 

But we seek assistance from the Legislature to allow all our members - big or small - to become part of the aggregator we wish to create. It is our belief that an aggregator for human service providers would allow us to provide better rates and limit exorbitant cost increases to an important population that does so much to help the Commonwealth's most vulnerable.

Conclusion

If this bill is signed into law, the Providers' Council could serve as a "qualified association" and aggregate members of any size will help human service providers throughout the Commonwealth. This solution, available at no discernable cost to Massachusetts, would allow our members to be part of a greater pool and have more leverage when negotiating for health insurance products. It will benefit employers, employees and the Commonwealth as a whole. 

Please give your favorable consideration to Senate Bill 534. The benefits of the bill are immense to a critical sector of workers, and as previously stated, the bill requires no additional state appropriation. We would be happy to discuss this bill with you more in the future. Thank you for your time.