The board that oversees Massachusetts’ landmark health insurance law voted this week to delay key elements of the plan by a year and a half to give residents and businesses a chance to ramp up their health care coverage to meet more stringent requirements.
Residents would still need some kind of health care coverage by July 1 or face tax penalties next year.
But hallmarks of the plan — including the requirement that everyone be covered for prescription drugs — wouldn’t kick in until January 2009, under the preliminary regulations approved Tuesday.
Officials said the extra 18 months are needed to give employers, workers and insurers more time to adopt what the state defines as “minimum creditable coverage” — or the most basic health insurance that the state will recognize under the law.
“It’s important that we do not unduly disrupt the situations of hundreds of thousands of people who currently have insurance,” said Leslie Kirwan, chairwoman of the board and Gov. Deval Patrick’s top budget official.
Kirwan said the first goal is to make sure virtually all Massachusetts residents have some insurance by July 1, as required by the law, before mandating what should be included in those plans.
The regulations, when given final approval, would make Massachusetts the first state to require a range of insurance features, including drug coverage. All regulations approved Tuesday now face a public comment period, with a final vote scheduled for June.
“This is another giant step forward,” said Jon Kingsdale, executive director of the Commonwealth Health Insurance Connector, which oversees the law. “This is really not about employers vs. individuals vs. taxpayers.”
While virtually any licensed health plan will count for the July 1 deadline, by January 2009 only those plans that meet the state’s new basic requirements will be considered adequate to avoid future tax penalties.
Businesses had pushed for the extension, saying they needed more time to comply with the law.
“That gives us more time to educate employers and individuals about what’s being recommended here,” said Richard Lord, a board member and president of Associated Industries of Massachusetts.
Kingsdale also said part of the reason for pushing back the deadline was that businesses have staggered enrollment periods for insurance.
The board also voted Monday to require prescription drugs as part of the minimum coverage over the objections of some employers, who said the drug coverage put too much of a financial burden on businesses.
Individuals would face a maximum $250 deductible annual on prescriptions, with insurers picking up the rest of the cost. The maximum annual deductible for families would be $500. Individuals and families would still be subject to copays.
“It’s a wonderful standard to be setting for the rest of the nation,” board member Celia Wcislo said.
The board backed away from imposing a ban on lifetime benefit caps on coverage. There are about 360,000 people in Massachusetts whose health plans include a lifetime benefit limit, typically between $1 million and $5 million.
The ban had been recommended by a committee of the board last week, but it opted instead to allow the lifetime caps for now.
Some businesses said the board’s definition of what constitutes minimum acceptable coverage was too strict.
Casey Tincier, comptroller for Gibson Engineering in Norwood, said the health plan the company currently offers wouldn’t meet the state’s definition because its deductibles are too high. She said January 2009 is too tight a deadline.
“For a lot of employers, it’s not going to be enough time. It’s a very tight timetable,” she said. “Our employees like our plan.”
Some health care advocates called on lawmakers to delay the tax penalties.
“Good citizens of the commonwealth must not be punished for being poor,” said the Rev. Hurmon Hamilton of the Greater Boston Interfaith Organization.
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