State health insurance law may create crisis for providers

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A new health insurance law in Massachusetts could create a "financial crisis" for many healthcare providers, including nursing homes, according to an analysis in the Boston Globe.

Under the law, all state residents must sign up for an insurance plan by July 1 or face potential penalties, including the loss of their personal state income tax exemption. Employers that offer coverage usually agree to pay a portion of the premiums.

Prior to the law, many employees at small healthcare providers did not enroll in employer-sponsored coverage because they considered it unaffordable. Some of these providers, including many of the state's nursing homes, say their healthcare costs are increasing substantially as more workers enroll in the employer-sponsored health plans to comply with the new law. Providers are then unable to offset the additional cost increases "because their revenue is largely dependent on fixed federal and state reimbursements," the Globe reports.