A Kafkaesque health care assessment

Many human service providers caught in nightmarish catch-22

EVEN FRANZ KAFKA would be taken aback by the state’s convoluted and self-defeating health care assessment on human service providers.

Imagine the following:

A non-profit organization provides critical services to the blind and disabled under contracts with the state. The state effectively pays only $13 an hour for the direct care workers hired by the organization. The organization has repeatedly petitioned the state to increase its rate since it is exceedingly difficult to attract workers for these challenging jobs in this full employment economy. The state has steadfastly rejected these requests.

When an employee is hired, he/she of course needs health care benefits. This particular organization offers a decent health insurance plan but there are costs for premiums, co-pays, and deductibles that are difficult if not impossible for the employee to pay. However, because of the low wages, the employee is eligible for MassHealth or subsidized insurance through the Connector. The employee makes the obvious choice to get his/her insurance through MassHealth or the Connector.

But here’s where the nonsensical health care assessment comes in.

Franz Kafka

In a misguided effort to help balance the MassHealth budget, in 2017 Gov. Charlie Baker proposed and the Legislature approve an ill-conceived assessment on employers for all their employees who are enrolled in publicly funded programs, either MassHealth or subsidized Connector coverage.

The problem with the assessment, besides the fact that there is no rationale for it, is that it falls most heavily on small employers with low-wage workers. This is especially problematic, and paradoxical, for human service organizations since they have no control over the arbitrarily low wages the state pays for their services.

The Department of Unemployment Assistance, which administers the program, ostensibly recognizes this problem. In considering hardship waivers, the regulations give special consideration to five groups of employers, including “employers that serve the public interest by providing human services or long-term care services and that receive a significant share of revenues from governmental programs.”

However, when it comes to actually granting waivers, the requirements are far too strict — the employer needs to prove that “failure to obtain a hardship waiver is likely to result in a substantial reduction in services, or termination of the employer’s business, or in substantial loss of employment.”

But in their contracts with the state, human service providers are required to deliver a certain level of services. If there were a “substantial reduction in services,” they would default on their contracts.

As a result of this catch-22, most human service providers face an insurmountable obstacle in gaining a hardship waiver; in the end they have little choice but to pay the assessment. For one medium-sized provider I know, the assessment in 2018 was more than $100,000, which puts serious strains on an already razor-thin budget.

The legislation establishing the assessment did so for two years — 2018 and 2019. Associated Industries of Massachusetts, the state’s largest business organization, has filed legislation to end the assessment now, arguing correctly that enrollment in MassHealth has fallen and the assessment has raised significantly more revenues than anticipated.

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Ending the assessment certainly makes sense, but in the meantime the administration should make special provisions for human service providers. This Kafkaesque nightmare does a serious disservice to the thousands of human service providers who go to great lengths to help the neediest individuals in the state.

Michael Widmer is an analyst of Massachusetts state government who lives in Belmont.