Worcester Business Journal

22 Worcester Business Journal • June 8, 2015 www.wbjournal.com Knowledge + Experience + Trusted Advice. It all adds up. Large enough to serve the needs of most businesses and individuals; small enough to offer the personal attention you expect and deserve. Greenberg, Rosenblatt, Kull & Bitsoli, PC Certified Public Accountants 306 Main Street, Suite 400 • Worcester, MA 01608 508.791.0901 • www.grkb.com Simply Beter. saversbank.com 800.649.3036 Member FDIC Member SIF Equal Housing Lender It's Your Move. Choose Wisely. Our Commercial Services Team is the wise choice to help your business win the game. Make your move, choose Savers Bank today. Health reform's uncertainty weighs on insurers, employers of Fallon Health, said reimbursement for its public health care programs, which provide about half of Fallon's rev- enues, has been "strained" by govern- ment cost-cutting efforts. (Fallon reported a $4.2 million net loss in Q1.) Meanwhile, Walker said, the price of new specialty drugs, particularly some very expensive ones for hepatitis C, are offering great hope for people with seri- ous health problems, but also putting pressure on all insurers' budgets. "It's a national challenge that we have to wrestle with," he said. "There is a soci- etal issue with more and more of these specialty drugs on the market." Tufts, Fallon and Harvard Pilgrim Health Care say a part of the ACA that's hurting them this year is risk adjust- ment, a measure intended to equalize the burden of caring for the sickest. The idea is to impose a fee on plans that serve mostly healthy people and use the money to help reduce costs for those that take care of people with the greatest need. Though the details aren't settled yet, in Massachusetts, it looks like this provision benefits Blue Cross at the expense of the other insurers. "Risk adjustment is complex in general, but I think in ... Massachusetts, it solves a problem we didn't have," Walker said. Fallon and other insurers argue that the provision was intended to address an influx of uninsured with serious health problems into insurance markets when the ACA took effect. In Massachusetts, because the state's own reforms had already reduced the number of people without insurance to a minimal level, the insurers say it's unnecessary. Blue Cross's Maltz said the risk- adjustment provisions do their job in making sure people with preexisting conditions can get insurance. As the law requires, he said, the company passes on risk-adjustment payments to customers when it prices its plans. "I've heard the wailing … of some of our competitors," Maltz joked, "But, for one thing, this is something that's been well known. It's not something that's caught anybody by surprise." More jumps in premiums? For employers, of course, the bottom- line question is whether changes in insurance — created by the ACA or not — will affect their premiums. Christopher P. Geehern, executive vice president of marketing and communica- tion at Associated Industries of Massachusetts, said premium increases in the last few years haven't been rising at the startling rates that had been com- mon before that. But he said they're likely to start jumping again before long. "I think employers are certainly happy for the respite," he said. "But most of the experts that we rely on seem to believe that upward pressure on rates is going to resume." One factor driving up some premi- ums could be an ACA-mandated change in the combined market serving indi- viduals and small businesses, opening it to businesses with up to 100 employees, rather than 50, as it stands now. "That's certainly going to create some issues and exacerbate the costs for some employers," said Eric Linzer, senior vice president of public affairs and opera- tions for the Association of Massachusetts Health Plans. Linzer said some employers with mostly young, healthy workers may choose to self-insure rather than become part of the newly defined market. That, in turn, would leave an older, sicker popula- tion in the risk pool, increasing costs for companies and individuals that remain. So far, despite the changes taking place in the insurance market, employ- ers don't seem to be seeing sudden jumps in premium costs. "I'm not hearing directly from mem- bers yelling and screaming, 'Oh my God, my rates went up 80 percent,'" said Stuart Loosemore, director of government affairs and public policy for the Worcester Regional Chamber of Commerce. Loosemore said it's possible employ- ers are seeing rate hikes they're not dis- cussing with the chamber, but other issues may be weighing more heavily. "I don't know that we're going to know the true impact of this until years from now," he said. "It just leaves a lot of ques- tion marks." n Blue Cross Blue Shield Harvard Pilgrim Tufts Health Plan Fallon Health ($73.1M) ($41.8M) ($19.6M) ($17.6M) ($24.2M) ($19.9M) ($6.6M) ($4.2M) Operating loss Net loss Down numbers The state's top four health insurers suffered millions of dollars in losses in the first quarter. Sources: Individual companies >> Continued from Page 1

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