The Spectacle Blog

Mass Care Not Working Out—Part XIV

By on 1.17.07 | 2:18PM

Well, guess who is bearing the cost of Governor Romey's individual mandate to purchase health insurance? Why, those who can least afford it, of course. From the Boston Globe:

The state's landmark healthcare reform, which seeks to provide universal health insurance coverage, is creating an unexpected financial crisis for many clinics, nursing homes, and other healthcare providers.

The providers say they are bracing for substantial increases in their healthcare costs, as more of their employees comply with the reform law by signing up for insurance already offered by the small, nonprofit organizations.

Officials at area healthcare nonprofits say that compared to many other small businesses, they have a limited ability to offset the costs of adding workers on an insurance plan because their revenue is largely dependent on fixed federal and state reimbursements.

"We have 250 employees," said William J. Walczak , chief executive of the Codman Square Health Center in Dorchester. "If they all sign up for our insurance plan, that will mean an additional $400,000 or $500,000 in additional costs. Where's the money going to come from? It has to come out of our bottom line."

I'm sure Governor Romney didn't intend to hurt nonprofits that provide services to the elderly...

Sandy Albright , director of Kit Clark Senior Services in Dorchester, said one-third of her 150 employees are now enrolled in a healthcare plan through the center. It pays 50 percent of their premiums. If another 50 employees sign up in response to healthcare reform, Albright said, she expects her annual healthcare costs to more than double to $450,000. The center provides meals, transportation, home visits, and other services to seniors and others in Boston.

"We don't know what we would do under those circumstances," she said. "The best way to put it is this is an unintended consequence of the healthcare reform law."

...and nursing homes...

Marva Serotkin , chief executive of the Boston Home, a Dorchester nursing home with 96 beds, said it pays 70 percent of individual health insurance and 60 percent of family insurance for employees, or about $4,000 a year for individuals and $7,000 a year for families. About 43 percent of the 212 full- and part-time employees at Boston Home are enrolled in its plan, at a cost to the nursing home of about $360,000 annually. She expects another 30 to 35 to sign up under healthcare reform, adding at least $150,000 in expenses. But most of her residents pay their bills with Medicaid, the state-federal program for the poor, which reimburses nursing homes under a set schedule.

"I can't increase the cost of services," she said. "I don't know what to do."

...but he did.

UPDATE: A friend sent me an email about this article which I reprint below:

In short, nonprofits, which already don't pay taxes, think they are taking a big hit because they operate from a fixed income. Guess they think that private businesses can raise their prices at will to make up for the hit on their costs. The ignorance in the nonprofit sector never ceases to amaze.
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