MA Insurers, Hospitals Face Surcharges Under Cost-Control Bill

A bill passed Tuesday by the Massachusetts legislature to contain healthcare costs could leave insurers and large hospitals holding the bag for $225 million in surcharges over four years. Governor Deval Patrick (D) is expected to sign the bill into law.

The surcharge would be levied against health insurers($165 million) and larger hospitals ($60 million) to fund several provisions of the bill, including the creation of a $60 million prevention and wellness trust and $135 million in infrastructure improvements to community hospitals.

The trust monies would fund state grants for community-based prevention, public health, and wellness efforts to reduce the rates of costly preventable chronic diseases, such as obesity, diabetes, and asthma.

Health plans are predictably unenthusiastic about the surcharge. "We don't question the usefulness," explains Eric Linzer spokesperson for the Massachusetts Association of Health Plans, a trade organization. "But if it's for the general public good, then it's something we think the state should fund."