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Researchers: Health Costs Hurt Bay State Program

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Increases in the underlying cost of health care and health coverage could reduce employer support for the Massachusetts health reform program.

Researchers from the Center for Studying Health System Change, Washington, come to that conclusion in a new brief based on interviews with 28 stakeholders.

Massachusetts’ health finance law requires all employers with 11 or more employees to provide health coverage or else pay a $295 annual fee if they do not make a “fair and reasonable” contribution to the cost of workers’ coverage.

Since the law took effect in 2006, 439,000 people have gained coverage.

About 250,000 are participating in free or subsidized programs for individuals, and 160,000 individuals have obtained coverage through their employers, researchers estimate.

The employers are paying about $540 million, or $3,400 per worker, to cover the newly insured workers, researchers estimate.

About 86,000 taxpayers went without coverage in 2007 and paid a $200 penalty.

The penalty for going without coverage is set to double this year, and many employers have concerns about the cost and paperwork involved with complying with the new employer coverage requirements, the researchers write.