National Underwriter – Life & Health Edition
Massachusetts health insurers and officials are rushing to develop the products uninsured residents may have to buy to meet the state’s new health coverage ownership requirement.
The state adopted the new health finance package in April 2006.
One section will require most Massachusetts residents who do not have religious or philosophical objections to owning health coverage to have “minimum creditable” coverage by July 1, and for the state’s new Commonwealth Health Insurance Connector Authority to make a menu of plans designed for individuals and small employers available May 1.
The timetable established by state lawmakers is ambitious, but “we haven’t missed any deadlines yet,” says Connector spokesman Dick Powers.
The Massachusetts Association of Health Plans, Boston, also continues to believe in the effort to require universal coverage, according to MAHP Vice President Eric Linzer.
“We’re optimistic about the law,” Linzer says. “We’re committed to the law.”
Massachusetts residents with incomes below 100% of the federal poverty level qualify for free health coverage through state insurance programs, and residents with incomes ranging from 100% to 300% of the federal poverty level now qualify to buy subsidized coverage through a state program that took effect Jan. 1.
The Connector set up the subsidized program for moderate income state residents.
The Connector now is setting up the program that is supposed to go live May 1st. That program will provide health coverage for residents who have incomes over 300% of the federal poverty level.
The new Connector program, which is supposed to have products ready for purchase by May 1, is supposed to offer individuals, families and small groups a wide variety of affordable health coverage products that meet state quality standards.
Connector officials hope the menu will include “premiere” plans, value plans and young adult plans. The menu also would include “minimum creditable coverage” plans, which would provide just enough coverage to help state residents meet the new requirement that they carry adequate health coverage.
Minimum creditable coverage plans could impose deductibles as high as $ 2,000 for individuals and $ 4,000 for families, with out-of-pocket maximums of $ 5,000 for individuals and $ 10,000 for families, but the plans could not impose annual or lifetime spending limits, and the products could not include an annual maximum, lifetime maximum or maximum benefit per illness or injury, officials say.
Earlier this year, Connector officials were talking about requiring that the minimum creditable coverage plans offer prescription coverage with no deductible. Officials found that plans were estimating coverage meeting their specifications would cost individuals about $ 380 per month, which was higher than they and consumers in the state had hoped.
MAHP argued that requiring drug coverage could disrupt the market by forcing some individuals and employers to increase spending to buy plans offering benefits that they now do without.
MAHP wants the Connector to create new options for consumers, not remove existing options, Linzer says.
Informal surveys later found that about 200,000 Massachusetts residents now have plans with no drug benefits or with a deductible that participants must meet before drug benefits kick in.
The Connector now is asking health plans to submit proposals for minimum creditable coverage plans that would not include drug benefits.
“The Connector staff has been very responsive,” Linzer says.
An out-of-state group, the Foundation for Taxpayer and Consumer Rights, Santa Monica, Calif., has argued that Massachusetts should make health care providers, health insurers and health maintenance organizations justify their prices rather than cutting minimum creditable coverage rates by cutting program benefits.
