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Deal would charge firms that don't insure workers

State legislators end stalemate on healthcare

Senate President Robert Travaglini (left), Senator Therese Murray, Representative Patricia A. Walrath, and House Speaker Salvatore DiMasi shared a laugh yesterday about how the two legislative leaders came to a compromise on a new healthcare bill.
Senate President Robert Travaglini (left), Senator Therese Murray, Representative Patricia A. Walrath, and House Speaker Salvatore DiMasi shared a laugh yesterday about how the two legislative leaders came to a compromise on a new healthcare bill. (Globe Staff Photo / David Kamerman)

After a three-month stalemate, House and Senate leaders yesterday agreed to charge assessments on businesses that do not provide health insurance to their workers, clearing the way for the Legislature to enact a sweeping healthcare bill and make the state eligible for $385 million in federal Medicaid money.

At a closed State House meeting that included representatives of the business community, Speaker Salvatore F. DiMasi and Senate President Robert E. Travaglini agreed to assess companies with 10 or more employees that do not provide health coverage $295 a year for each worker, said several negotiators, who spoke on the condition of anonymity.

A senior legislative aide estimated that the plan, when phased in over the next several years, could cover half to two-thirds of the state's 500,000 to 600,000 uninsured. But lawmakers refused to provide details of the compromise, including the number of people who would be covered. When the debate began more than a year ago, some lawmakers and liberal advocates wanted to cover all the state's uninsured.

The Massachusetts Taxpayers Foundation and the Greater Boston Chamber of Commerce hailed the agreement, but small business groups and the state's high technology representatives worried that the assessment would increase their employment costs and stifle job growth. Firms that do not provide coverage currently do not face an assessment.

''This is a huge breakthrough," said Michael Widmer, the president of the Massachusetts Taxpayers Foundation, who helped broker the deal. ''This is the moment that health reform can become real. It will set Massachusetts apart from the rest of the nation."

But Christopher Anderson, president of the Massachusetts High Technology Council, said: ''It's an ominous development for the Massachusetts economy."

It was not clear yesterday whether Governor Mitt Romney, who vowed to veto an earlier proposal by DiMasi to impose a payroll tax on firms, will accept the latest version of the bill. But legislative insiders said Romney's threat of a veto is irrelevant because they predicted the heavily Democratic Legislature would easily override it.

Romney, who flew to Utah yesterday, said in a statement that he was ''pleased the impasse had been broken" but said he would withhold comment until he saw the details. ''I look forward to reviewing the bill as it moves along," he said in a statement.

Over the last 16 months, Romney, DiMasi, and Travaglini have all proposed various approaches to provide coverage to the state's uninsured and to meet the demands of federal health regulators, who have threatened to withhold $385 million in federal Medicaid if the state does not extend coverage to the uninsured.

The size of the business assessment has been the major stumbling block to a settlement. Legislative leaders and other negotiators said the assessment was set at $295 in order to pay for the free state healthcare used by workers whose companies don't provide health insurance. Widmer confirmed the size of the assessment yesterday, saying it would drop each year as more individuals have private insurance and do not rely on free care.

DiMasi had backed a stiffer tax, but Travaglini had strongly resisted and even pushed a stripped-down healthcare bill through the Senate earlier this week. That bill would have covered no more than 300,000 people.

The plan worked out yesterday includes a mandate that all individuals buy health insurance, a provision sought by Romney. It would also require private insurers to provide stripped-down health plans that are more affordable. Those who can't afford it would be eligible for state subsidies.

DiMasi and Travaglini, who have been longtime friends and colleagues representing the same Boston neighborhoods, were at odds over the healthcare bill in recent months. But the two joined their wives for a dinner Thursday night, and their wives urged them to set aside their hard feelings. ''We were scolded rather severely last evening at a dinner," Travaglini said at a press conference yesterday.

Travaglini worked out the deal yesterday with DiMasi and three business representatives: Widmer, Peter Meade, executive vice president of BlueCross BlueShield of Massachusetts, and Jack Connors, president of Partners HealthCare System.

Afterward, the two legislative leaders told reporters that they hope the work of the legislative conference committee working on the bill will be done next week and the compromise bill be voted in the House and the Senate in the next several weeks.

''Significant progress has been made," Travaglini told reporters. ''The logjam is no longer existing. . . . I am confident we will have a comprehensive healthcare package before both branches in a very short period of time."

Widmer, Meade, Connors, and others had cobbled together a coalition of business groups to produce the compromise that could satisfy both the House and Senate leaders while protecting the state's business interests. They particularly wanted to block DiMasi's payroll tax, which was seen as more expensive to businesses than the assessment proposed yesterday.

The compromise under discussion by lawmakers would also expand Medicaid coverage to more poor people, but would not provide the major expansion originally sought by DiMasi. The bill also would increase Medicaid reimbursements for hospitals, community health centers, and physicians, providing increased rates that will give them $270 million within three years.

Senate minority leader Brian Lees, a Republican serving on the conference committee, said he is confident the agreement will ease the way to passage of a healthcare bill. He noted that all businesses that currently provide healthcare are now assessed $62 a year for each insured employee while those that don't insure workers pay nothing into the free care pool.

He said this plan would shift the burden onto those who are not insuring workers and provide the financial incentive for them to do it.

From the opposite political spectrum, those who are pushing a ballot initiative to raise the cigarette tax and impose a payroll tax to provide universal healthcare, also withheld judgment.

''I am very happy there is a breakthrough," said John McDonough, executive director of Health Care for All. ''But we have to see the details before we can comment."

At stake in the debate how to restructure the healthcare system is $385 million in federal Medicaid money. Federal regulators are threatening to halt the payments beginning July 1 if the state does not make progress toward extending coverage to the uninsured.

The federal government has given little guidance to Massachusetts about what it needs to do to keep getting the Medicaid money. Officials with the Centers for Medicare and Medicaid Services did not respond to a request for their comments on the Massachusetts plan yesterday.

Legislators and others involved in the debate say they are confident the Legislature's move to break the stalemate will ensure continued funding.

Liz Kowalczyk, Alice Dembner, and Christopher Rowland of the Globe staff contributed to this article.

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