Bay State Health Plan Could Be Sued

Attempts by officials in charge of the groundbreaking Massachusetts universal healthcare law to close the program’s projected $130 million budget gap could run up against a federal lawsuit, according to the state’s largest private employer. Partners HealthCare, which has been a prime supporter of the law, warned that new regulations aimed at boosting private-sector contributions to the program could be shot down by a federal court.

In testimony at a public hearing on the new rules, Partners Healthcare noted that federal courts have frequently thrown out state laws that directly impose requirements on company-sponsored health benefit plans and that the proposed new regulations bring the Massachusetts law “dangerously close” to such a challenge.

Aimed at raising an estimated $45 million a year, the new rules would impose additional health insurance funding requirements on companies with more than 10 employees, a move that critics charge would hit small businesses especially hard. Massachusetts lawmakers have already passed legislation that requires hospitals to put up an additional $28 million and taps the reserves of health insurers for $33 million to help pay for the healthcare program.

Now in its third year, the Massachusetts healthcare reform law, which mandates health insurance for every Bay State citizen, has consistently cost more than budget projections and is likely to do so again next year. According to some state officials, increased enrollment and higher costs will add more than $100 million in expenses to the $869 million that has already been earmarked for the program in the state’s proposed 2009 budget. The 2009 allocation represents a 41% increase over this year’s budget amount.