Mass. health care law hasn’t stunted growth

The following is a slightly edited transcript of Sen. Dan Wolf’s testimony in Washington on Tuesday before the House Committee on Oversight and Reform regarding the job and economic costs of the federal Affordable Care Act. The other four individuals asked to testify before the committee took a very different view of the law. Click to read the testimony of John Goodman and Michael Fredrich.

I come before you today to share the perspective of a person who, thanks to the hard work and dedication of a team of remarkable individuals, achieved amazing success in one of the most challenging businesses of today, aviation.

Twenty-five years ago, as a trained mechanic and pilot, my dream was to start an airline in Massachusetts. With one plane, one route, and six employees, Cape Air flew its first scheduled flight in 1989.

Today, headquartered in Massachusetts, Cape Air operates in 11 states, 4 US territories and commonwealths, and 3 foreign countries. We will carry 725,000 passengers this year, and generate $105 million in revenue.

Cape Air now offers nearly 1,000 full-time jobs, with about 500 of them based in Massachusetts. Nearly 300 of our employees have been with the company for more than a decade.

Cape Air’s success allowed me, at age 52, to enter government and two years ago, voters from the Cape and islands chose me to represent them in the Massachusetts Senate.

My primary goal is to help government and private businesses partner in ways that make our communities healthier and our economy stronger, and what’s informing my perspective includes six years on the Federal Reserve Board’s Advisory Council for New England, board chair of one of the largest Chambers of Commerce in Massachusetts, and a trustee of the largest mutual bank in the Cape and islands region.

From all these vantage points, I’ve come to realize that one of the most important values we must embrace is that every American should have access to affordable, excellent health care.

We have come a long way toward accomplishing that goal in Massachusetts, and we have done so without stunting business growth, and without cutting jobs.

I’m here to debunk myths and dispel fear and misunderstanding about the 2006 health care reform act that Massachusetts enacted with strong bipartisan support. It also is the template for much of the Affordable Care Act now sanctioned as the law of our land.

From Cape Air’s first day in business, we offered health care coverage, knowing that affordable health care coverage helps us retain a great workforce. This year, Cape Air’s health insurance premiums will total close to $3 million, roughly 3 percent of the company’s gross income. The company will pay just over half of that cost, employees the rest. In 2007, when Massachusetts health care reform went into effect, there were dire predictions of the impact on businesses like Cape Air.

Here’s what really happened:

We added some new dependents under 26 years of age to family plans. Beyond that, the transition was seamless. There was no bureaucracy or heavy lifting in the front office.

Since then we’ve added a solid 15 percent more Massachusetts-based jobs, with our total revenue growing far faster.

Health care reform has not stifled business.The Massachusetts Health Care Reform was designed to ensure access, not curtail cost. With landmark state legislation now close to passage, building on the success of the 2006 act, Massachusetts is on the verge of implementing new strategies to contain costs, while continuing to provide coverage for more than 98 percent of Massachusetts residents.

But I can also report that health care costs have not spiraled because of the plan, far from it. This year, Cape Air saw a 5 percent increase in premiums – too much, but far from the 15 to 20 percent increases we saw year after year before reform took effect. Last year, our increase was 4 percent. The previous year, we were able to negotiate a 5 percent decrease.

So Cape Air’s success should be seen in a state context. Unemployment in Massachusetts has dropped from 8 percent in 2009 to 5.8 percent in May of this year. This is 2.4 percent below the national average. Massachusetts ranks eighth in the nation in job creation this year, adding 37,800 new jobs through May. Since January, 2007, Massachusetts ranks third in the nation in economic performance, as defined by our gross state product.

Meanwhile, additional state spending for health care programs resulting from payment reform only represented 1.4 percent of the state budget in 2011 — again, with more than 98 percent of our residents covered, which includes a 400,000 net increase in the number of non-elderly insured residents.

And the Health Connector – the Massachusetts version of the health insurance exchanges in the Affordable Care Act – has reduced premiums in the last 2 years by 10 percent. These facts explain why surveys consistently find that about two-thirds of our residents support the state’s health reform.

As important and positive as enacting the Affordable Care Act is and will be, it’s not the last word. Just as Massachusetts is now moving forward with cost containment initiatives, there will be more opportunities to continue to reform our health care structure. Access is only one of the pillars on which great health care is built. The other issues to address are cost, complexity, outcomes,and transparency.

Meet the Author

Dan Wolf

Senator, Massachusetts Senate
I look forward to a national conversation about all of them, and especially an understanding of the link between a healthy business climate, and access to health care for all.

Dan Wolf is the senator from the Cape and islands and the president and CEO of Cape Air.