Wednesday, September 28, 2011

Health Care Payment Reform: Working for Legislation to Accelerate Cost Progress

After holding hearings on the Governor’s health care payment reform proposal, the House and Senate are now developing their own bills. The Chamber continues to work with key legislators, and a coalition of stakeholders that has developed a set of principles to guide payment reform, for a bill that addresses the health care cost problem without harmful side effects.

Payment reform legislation should take into consideration changes in the market that are slowing the growth of health care costs. Tiered network products, which offer cost savings for employees and employers, are becoming a popular option. Their expansion is a direct result of the Chamber-backed health care reform bill enacted in the summer of 2010 (Chapter 288). While some of the Chapter 288 reforms have already been implemented, more are coming which will bring additional cost relief. In addition, insurers recently reached an agreement to limit increases in premiums for small businesses and individuals to 5.9%. The Chamber believes that payment reform legislation should promote and accelerate this progress, without resorting to rate regulation or other forms of price controls that would stifle innovation.

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