Massachusetts would become the first state in the nation to essentially require all insurers provide prescription drug coverage, under recommendations made Tuesday to the board overseeing the state’s landmark health care law.
The recommendations would also make Massachusetts the first state to ban lifetime limits on health care benefits. Currently there are about 360,000 people in Massachusetts whose health plans include a lifetime benefit limit, typically between $1 million and $5 million.
Under the recommendations, which are expected to approved by the Commonwealth Health Insurance Connector board next week, individuals would be required to pay no more than $250 year on prescriptions, with insurers picking up the rest of the cost. The annual deductible for families would be $500.
The coverage would add an additional $15 to $20 to monthly premiums for the lowest cost plans, according to the recommendations. A special “young adult” plan wouldn’t require the drug coverage.
Members of the board said they understood they were moving into uncharted territory.
“No other state has done these things,” said Connector Executive Director Jon Kingsdale. “We are on the leading edge.”
Although insurers could still legally offer plans that didn’t meet the new standards, those plans would not be in compliance with the state’s mandated minimum coverage. Those who enrolled in the plans could face tax penalties under the law.
Members of the board also conceded for the first time Tuesday that the state would likely have to phase-in some of key recommendations to allow businesses to catch up.
While the goal would be to require drug coverage for all residents, for example, that requirement would not kick in until September 2008 — more than a year after the law takes effect this July.
Kingsdale said the extra time is needed because businesses offer open enrollment periods in health care plans at different times of the year and mandating all the new requirements to kick in this July would force some businesses to cancel health care contracts.
Leslie Kirwan, chairwoman of the board and Gov. Deval Patrick’s top budget official, said the delay is needed to make sure the law is put into effect in an “orderly, non-disruptive way.” She said anyone with health care on July 1 would be in compliance with the law, although those who don’t have drug coverage would need to add that by September 2008.
The debate comes a week after the board voted to give the state’s seal of approval to seven private, low cost plans, with monthly premiums ranging from $175 to $288 for the average 37-year-old uninsured resident living in the metropolitan Boston area.
Not everyone backed the recommendations.
The proposals could hurt Massachusetts residents who work for national companies that likely won’t change their health care plans to meet the state’s new standards, according to Marylou Buyse, president of the Massachusetts Association of Health Plans.
“Hundreds of thousands of workers are going to be unfairly penalized because although they are insured, they are going to have plans that are not compliant,” with the new regulations, she said. “There’s no guarantee that a national employer is going to make a change to comply with Massachusetts’ minimum creditable coverage.”
Richard Lord, a board member and president of Associated Industries of Massachusetts, said the regulations could also hurt small businesses.
Lord said he was particularly worried about the prescription drug requirement, saying that would drive up costs for employers.
“People are confused. No other state has done any of this stuff,” he said. “I think we are going beyond the original intent (of the law).”
While he recommended the state require drug coverage, Kingsdale also cautioned the board against overreaching.
“We probably shouldn’t push too hard on some straws because if we do they could break and the people who get hurt are the employees,” he said.
Also Tuesday, a study published in the Journal of the American Medical Association by Harvard Medical School and Harvard-Pilgrim Health Care, found high-deductible health plans with low monthly premiums, like those unveiled by Patrick, cut down on emergency room visits.
The study found that patients with high deductibles sought emergency room treatment 10 percent less than patients with traditional plans for less severe conditions like colds, nausea and headaches.
“Our study showed that for most members, the high-deductible plan seemed to work as intended,” said Dr. Frank Wharam, the study’s lead author.
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