Massachusetts health insurers and their small business customers will have another year with a sort-of sharing risk rating system, although eventually they'll be in for reckoning.
Massachusetts has secured a one-year waiver from the U.S. Department of Health and Human Services to keep using small group plan rating factors that were prohibited by the Affordable Care Act.
It's a partial victory that continues a gradual phase out of Massachusetts' 2006 merged individual and small group market's ratings factors, but it's an important piece of flexibility, said Governor Charlie Baker, who sought the waiver.
"Protecting small businesses from massive insurance rate hikes is essential to making sure job creators continue to thrive here and I am grateful the Obama administration granted Massachusetts this flexibility," said Baker, a former CEO of Harvard Pilgrim Health Care. "The Commonwealth has been a national leader when it comes to making sure our residents are insured and able to receive the care they deserve and we must protect that progress."
Massachusetts' famous 2006 health reform law helped lead to near-universal coverage, thanks in part to a state marketplace that merged the individual and small group segments. That relied in part on ratings factors with "protection for small employers who took on risks from the individual insurance market," as Baker's office put it.
HHS first gave Massachusetts a waiver on the ratings in 2013. The new waiver lets the Commonwealth's small group health plans use two-thirds of the current ratings factors through 2016, then one-third of them until the end of 2017. In 2018, they will all be phased out.