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The governor of Massachusetts recently pitched a new proposal that will help to lower the states spending on Medicaid.

In a recent article featured in The Wall Street Journal, Jennifer Levitz and Melanie Evans write:

“With an employer penalty, the governor is aiming to solve what he sees as a flaw in the national health law: Medicaid ends up being more appealing to low-income workers than insurance offered by employers, raising the costs for the state. “

The Massachusetts governor, Charlie Baker, understands that the Affordable Care Act (ACA) has lead to many employee’s that qualify for Medicaid to choose that health care coverage instead of the employer sponsored health plan. By doing this, those employees receive a more traditional health care coverage and lower overall costs, instead of the employer’s high deductible plan that requires larger out-of-pocket expenses.

This new proposal pushes employer’s to cover more employees with their company provided health care plan to avoid a $2,000 fine issued per worker who is not using the company’s plan.┬áBy issuing this large fine, the state hopes to decrease the state’s spending on government sponsored Medicaid.

Additionally, the governor’s proposal also includes some hospital price limits for privately insured patients. This is said to help protect employer sponsored plans from shocking billing practices.

If other states follow Massachusetts’s lead, employer sponsored medical coverage plans could become even more expensive. Because of this, it is important to continue to stay on top of new ways to manage your company’s health care plan. This is critical to help maintain and battle the cost of most employer’s second highest expense behind payroll.

Read Massachusetts Governor Pitches Health-Insurance Penalty for Employers, from The Wall Street Journal for more information.