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BOSTON, MA — Facing criticism from lawmakers, industry leaders and health care advocates, the state authority overseeing implementation of the new health care law today agreed to postpone a key decision on new health insurance products.

The decision by the Health Insurance Connector Authority came after a top aide to Gov. Deval Patrick called premiums leveled tied to insurance products offered last week “disappointing.” Administration and Finance Secretary Leslie Kirwan, who chairs the authority board, said talks about the products will continue based on revised guidelines the board agreed to today, without taking a vote.

Under state law, individuals will be required to have insurance by July 1, 2007. The board must determine minimum coverage levels that will determine whether plan holders can avoid financial penalties under the state law that requires insurance.

“Affordability and choice are critical for us,” said. “We are not going to rush on a vote.”

Kirwan also said that insurance premium estimates released last week, which raised concerns about the affordability of plans to individuals who currently don’t have insurance, were incomplete.

“It wasn’t the full story,” she said. “But still, the first news was disappointing.” Kirwan said “a number of carriers” responded to the board’s requests for proposals within the affordability range but said she could not elaborate due to ongoing negotiations with the carriers.

“This is the time to step back, make some adjustments and work with the carriers,” she said. Kirwan said she believes the board, despite the delay, will be able to take a final vote on the regulations by March 8.

Kirwan’s comments come after the Connector’s policy committee meeting last Friday, when board members learned plans submitted by carriers in response to state requests outlining minimum health coverage would cost on average $380 a month to uninsured individuals making more than $29,400 a year. The premium number was $100 above what the board had originally hoped for, with members calling the submitted plans “too expensive” to the group targeted for the plans — working individuals who are uninsured and not eligible for state-subsidized coverage.

During today’s meeting, the board adopted most of the policy committee’s revised recommendations on the minimum coverage criteria guidelines health plans would need to include to satisfy the individual mandate.

The board agreed to ask insurers to come up with plans that cap the out-of-pocket maximum to $5,000 for individuals and $10,000 for families, cap the annual deductible to $2,000 for individuals and $4,000 for families, cover prescribed medications, with generics covered before the deductible, and three office visits for primary care physicians, or the equivalent, for individuals and six visits for family plans.

The board debated extensively on whether the plans were too prescriptive. Kirwan, after the meeting, told reporters that the board would like insurers to “get creative” but in a bidding proposal, the A F secretary said it was necessary to be specific so the prices are in line with what the board considers acceptable.

But insurers today said the draft regulations are “too prescriptive” and they would make it more difficult to reduce the ranks of the uninsured.

In a statement issued today, Massachusetts Association of Health Plans President Marylou Buyse, said the Connector’s policy committee recommendations will “impede the ability to make affordable coverage available and achieve the goal of universal coverage.”

“Instead of reducing the number of uninsured in the state, the standard for minimum creditable coverage recommended by the Subcommittee will move us in the opposite direction. The subcommittee has recommended that coverage benefits be broad and that cost control measures be limited; this will make it difficult, and perhaps impossible, to make affordable coverage available to uninsured individuals. Further, the proposed recommendations will jeopardize access to coverage for many who currently have coverage,” said Buyse.

According to Eric Linzer, vice president of the MAHP, the board’s agreement to cap the annual deductible was not consistent with the federal standards for health savings account, which he said in 2007 determined the maximum deductible to be $2,800 for individuals and $5,650 for families.

Linzer echoed board member Rick Lord’s comments that it was concerning the Connector was going to make prescription drug coverage part of the mandate.

Lord said there are several plans in the market that do not offer prescription drug coverage.

After the meeting, Kirwan told reporters that the figures provided to the Connector at Friday’s meeting caused “a good deal of frustration” and disappointment to board members, health care advocates and state government officials.

“Clearly the governor and the legislative leadership were disappointed as well,” said Kirwan.

House Speaker Salvatore DiMasi said he is worried that prospective monthly costs of new insurance packages may be running over $100 above initial estimates. DiMasi said, before a leadership meeting at the State House, that he planned to talk about it with Patrick and Senate President Robert Travaglini.

“All of the major insurers in Massachusetts said they were going to be between $260 and $280 per month,” DiMasi, who has claimed credit for the majority of the reform, told reporters today. “Now it’s higher, and I want to find out why.”

After the leadership meeting, Patrick said he is also concerned that plans may not be affordable.
“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 affordable, in fact. What is the right number is part of the work that the Connector Authority has yet to do,” said Patrick.

Asked if he was willing to relax the July 1 deadline, Patrick replied, “I hope we don’t have to. I know that there is a lot of work yet to do. I understand that there is a range of bids that’s quite a bid broader than what I read about in the newspaper Saturday.”

After talking with DiMasi and Travaglini, Patrick said, “We do want to give the Connector board staff a chance to work with the providers to improve the bids, because it’s very important that what is on offer is in fact affordable.”

Kirwan also said that she does not think it will be necessary to postpone the July 1 mandate date.

Lisa Kaplan Howe from Health Care for All said she thought it was appropriate the board delayed a vote.

“We think it’s a really important decision and it needs to be based in as much information as they can get. While we appreciate how hard the Connector has been working, we think it is appropriate for them to take their time to make it right,” said Howe.

Massachusetts Hospital Association Interim President Robert Gibbons said the organization is also supportive of the Connector’s decision to postpone a vote. In a statement, the association expressed “deep reservations” about the new products offered by insurers and claimed premiums and out-of-pocket co-pays and deductibles were “too high.”

“We are hopeful that the Connector Authority, in consultation with insurers, health care providers and advocates for health care access, can reconcile the objectives of affordability, choice and appropriate benefits. We know it won’t be easy. The success of the entire health reform effort hinges on enrolling people and employers who now opt-out of the private health insurance marketplace. For our part, hospitals are deeply committed to achieving that success,” Gibbons said.

Carmen Balber, a consumer advocate from the California-based Foundation for Taxpayer and Consumer Rights, called the $380 month premiums “totally unacceptable.”

She said that the solution in striking the right balance between affordability and descent health coverage is by having the insurers absorb some of the cost by lowering their profit margins.


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