The average uninsured Massachusetts residents could obtain health care coverage for as little as $175 a month under the state’s insurance law, Gov. Deval Patrick announced as he released the results of negotiations with the state’s health insurers.
The lowest monthly premium is far lower than an earlier estimate of $380 a month suggested by some insurers.
“This is a big improvement from the first round of bids and a big step forward for health care reform,” Patrick said. “The health security that was the point of health care reform will be delivered at an affordable price.”
The minimum plan detailed by Patrick would cover the average uninsured Massachusetts resident, who is typically around 37-years-old. It includes prescription drug coverage and covers basic medical care, such as emergency room visits and outpatient medical care.
Lower cost plans would be available to young adults. Prices would also rise and fall depending on the age of the person seeking insurance and where they live. If purchased on a pre-tax basis, the lowest cost plans drop to $109 a month for someone earning $50,000 a year.
The panel charged with overseeing the law, the Commonwealth Health Insurance Connector board, is expected to give its seal of approval to the seven health care plans that met the affordability goals at its meeting Wednesday.
On March 20, the board will vote on whether the insurers will be able to offer lower cost versions without drug coverage. Health care advocates have said any minimum coverage must include prescription coverage. They said that without it, the state would be giving its blessing to inferior insurance plans.
The insurers include Blue Cross and Blue Shield of Massachusetts, ConnectiCare, Fallon Community Health Plan, Harvard Pilgrim Health Care, Health New England, Neighborhood Health Plan, and Tufts Health Plan.
The lowest bidder was Neighborhood Health Plan.
All of the plans must include coverage for preventive doctor visits and an out-of-pocket limit, after which the plan would pay everything else to prevent individuals from facing bankruptcy, said Connector Authority Executive Director Jon Kingsdale.
The insurers will be able to offer different kinds of plans, from basic to premier coverage.
The plans are a critical piece of the landmark insurance initiative, which requires all Massachusetts residents to have health coverage by July 1 or face tax penalties.
One of the toughest parts of the law has been trying to come up with relatively low cost private health plans for uninsured residents earning too much to qualify for subsidized care, or about $29,400 annually for an individual. An estimated 160,000 to 200,000 people are uninsured and do not qualify for state-subsidized plans.
But coming up with a definition of what the state considers minimal coverage proved elusive. The definition is crucial, since only plans that meet the guidelines will receive the state’s blessing and exempt those who enroll in them from the possible tax penalties.
As the law was being unveiled last year, former Gov. Mitt Romney said the goal was to get monthly premiums as close to $200 a month as possible.
That hit a snag when insurers warned that without more freedom to offer plans that would drive down premiums by reducing coverage, the monthly premiums could creep closer to $380 a month.
Those estimates dropped after the companies were told to go back to the drawing board.
Patrick said he personally intervened, calling the chief executive officers of three of the state’s largest insurers and encouraging them to do better.
“I said I want you and your staff to cooperate with the Connector board and their staff to find a more affordable solution,” he said, adding that he relied on the “power of persuasion.”
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