Mass. Panel Seeks More Low Cost Health Plan Options

By | January 25, 2007

The panel assigned with turning Massachusetts’ groundbreaking health care law into a reality sent insurers back to the drawing board this week, saying they need to do a better job at coming up with low cost health care plans.

The move came after members of the Commonwealth Health Insurance Connector were told that the average price for the new plans could cost about $380 a month, almost twice what former Gov. Mitt Romney had predicted before signing the law last year.

On Monday, the group set new guidelines for the proposed minimum health care plans and told insurers to try again to get the price lower. Under the new law, all state residents are required to have health insurance by July 1 or face tax penalties.

Leslie Kirwan, chair of the panel and Gov. Deval Patrick’s administration and finance chief, said insurers need to “sharpen their pencils” and look for creative ways to bring down costs.

“The governor and legislative leaders were disappointed,” Kirwan said of the first round of bids from insurers. “This is a shared disappointment.”

The plans are intended for those making more than three times the federal poverty line who are currently uninsured. Those making less than that level already have access to state subsidized plans.

Before asking insurers to come up with lower cost plans — which would ultimately get the connector’s “seal of approval” — the panel set minimum standards.

Among those are annual maximum out-of-pocket expenses of no more than $5,000 for individuals and $10,000 for families, and maximum deductibles of $2,000 for individuals and $4,000 for families.

The plans would also have to provide some prescription drug coverage — cheaper generic prescriptions would not be counted toward the deductible — and would have to pay for three office or preventative doctor visits for individuals and six for families.

Kirwan said she hoped insurers could come up with new proposed plans in the next few weeks.

Romney had projected monthly costs at $200 when he first proposed universal coverage. And based on information from actuaries reviewed by the board last fall, the panel had expected to get plans with a premium of about $260.

Insurers said putting too many mandates on the plans makes it harder for them to be creative and come up with lower cost plans.

“We still think they should be given greater flexibility to bring affordable products to market,” said Eric Linzer, spokesman for the Massachusetts Association of Health Plans.

For example, Linzer said requiring drug coverage is unfair to those residents who already have health care plans that don’t include drug coverage.

“That would essentially disqualify those products, forcing them to forgo insurance or buy more expensive products,” he said.

Patrick said he wants the board to work with insurers to bring down the cost.

“It is very important that what is on offer is in fact affordable,” Patrick said. “I’m worried based on the affordability sessions that I’ve been to that $400 a month for someone who is at 300 percent of the poverty level may not be affordable.”

House Speaker Salvatore DiMasi said he planned to meet with insurers to try to encourage them to come up with less expansive plans.

“All of the major insurers in Massachusetts said they were going to be between $260 and $280 per month and now it’s higher and I want to find out why,” said DiMasi, D-Boston.

Members of the Connector board disagreed on some key proposals.

Rick Lord, president of the Associated Industries of Massachusetts and a member of the board, said he was concerned that requiring the plans to include prescription drugs could force some people with existing plans that don’t have prescription coverage to spend more.

Fellow panel member Dolores Mitchell, who is also executive director of the Group Insurance Commission, said the board shouldn’t agree to higher cost plans without a fight.

“I think the first order of business is tougher negotiations,” she said.

The decision to head back to the drawing board drew applause from the interim president of the Massachusetts Hospital Association.

“The Connector took the right step today in postponing a vote on the standards for those products,” said Robert Gibbons. “The success of the entire health reform effort hinges on enrolling people and employers who now opt-out of the private health insurance marketplace.”

An estimated 160,000 to 200,000 people are uninsured and do not qualify for the state-subsidized plans. The minimum plan probably would be the least expensive they could buy.

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