The Connector Board met today for the first of three meetings during which they will set new affordability standards, and premiums and cost-sharing for Commonwealth Care and Commonwealth Choice (see materials here).
Affordability and cost control generated intense debate. Staff proposals on the affordability schedule and CommCare copays were scrutinized – Board members debated state cost, financial impact on consumers, and the crowd-out threat. The task is tough, and the debate is healthy - it leads to greater transparency and more informed decisions. We look forward to the next six weeks!
Executive Director’s Report
Jon Kingsdale began by emphasizing achievements realized in implementing Health Reform. There have been numerous tests and challenges. And, the Connector implemented a successful CommCare program and prices for non-group coverage have seen a marked decrease, to name a few. The biggest challenge ahead is cost. There are signs of success, such as CommChoice bids that produced below-market premium increases.
CommChoice Seal of Approval
The first issue was CommChoice renewals. Bob Carey presented staff recommendations on FY09 CommChoice plans. The staff evaluated renewal bids on four factors:
• Percent and dollar amount of premium increases
• Affect of proposed benefit changes on out-of-pocket costs
• Affect of proposed benefit changes on the relative plan value
• Potential member disruption created by modifying plans
The average premium increase was 5.1% (from a low of -2.7% to a high of 9.9%, both in the YAP level). This is good news because the average increase in Massachusetts premiums has been double-digit for the last eight years. However, the “savings” won’t be free for consumers. To achieve lower premium increases, two-thirds of the plans changed benefits (including all 6 Gold plans, 5 of 12 Silver plans, 4 of 6 Bronze plans, and 5 of 7 YAPs). The staff didn’t detail changes, saying the majority of changes involved adjustments to cost-sharing, particularly prescription drug cost-sharing, and/or the drug formulary (people now in plans being adjusted can keep coverage as is or move to a new plan). Carey said many plans that include drug deductibles exclude “Tier 1” drugs from the deductible, as the Connector requested. No plans that previously had not offered a select-network Bronze plan opted to offer one in addition to their broad-network plan in the Bronze level, as the Connector requested. Fallon currently offers only a select-network Bronze plan and has opted to offer both that plan and a broad-network Bronze next year.
In response, Lou Malzone expressed concern with the increasing complexity of the offerings, which may result in confusion and administrative costs. He and Dolores Mitchell asked staff to study having all carriers offer a limited set of identical plans. Nancy Turnbull asked staff to report on the premium impact of getting rid of the annual benefit caps in YAPs and how many enrollees are hitting the caps. The board will vote on the final CommChoice contracts with carriers on March 20th.
MMCO Contracts
Next the Board turned to MMCO Contracts. Jamie Katz wasn’t joking when he said he would talk a lot without saying much. Aside from noting a “frank and vigorous” discussion, he gave no details. He offered to take questions and no one took up his offer. The staff anticipates providing information at the next Board meeting (February 28th).
CommCare Enrollee Contributions and the Affordability Schedule
The Board took on proposed changes to the Affordability Schedule and proposals for CommCare enrollee contributions together since the first few tiers of the Affordability Schedule (0-300%FPL) mirror the CommCare premiums. Secretary Kirwan set the stage, emphasizing the goal of balancing affordability and fairness and turned the mike to Patrick Holland and Melissa Boudreault, who presented the goals and data.
A few data sets informed proposed changes. The staff looked at the level of contribution for typical ESI plans, median incomes for Massachusetts residents and premium trends for the CommChoice Bronze plans. Celia Wcislo questioned underlying assumptions with this approach. Wcislo asked why staff hadn’t looked at rates of increases in salaries and cost of living. Turnbull pointed out that the CommCare rungs (up to 300%fpl) experienced an average increase of 14% (the staff proposed raising CommCare contributions from $35 to $40, $70 to $80 and $105 to $120), while the upper end of the schedule increased by 5-10%, making the changes regressive.
Wcislo argued they shouldn’t base what is affordable for low-income groups on small group market rates. She emphasized the new premium and cost-sharing proposal is a significant jump for consumers. Turnbull echoed that, reminding the Board that what we’re talking about is an “affordability” schedule, and coverage offered by employers may not be affordable. The affordability schedule should not be led by an “unaffordable” standard. Wcislo argued the Board should look at all stakeholders to share the financial burden, including insurers and providers.
Boudreault emphasized that the premium payment rate in CommCare is high and demonstrates that current premium levels are indeed affordable.
Kingsdale agreed they need to be mindful of individual situations but reiterated the dangers of crowd-out. He said that 625,000 low-income individuals are taking employer coverage. Enrolling even 1-2% of that population would jeopardize the sustainability of the program.
CommCare Copays
Holland turned to the staff recommendations for new copay structures for CommCare. He outlined next steps in the MMCO bid process, explaining that no vote would be taken today. Delaying the vote allowed time for a robust discussion on these critical decisions. We thank the Connector for continuing to value transparency and process!
Copays in the plans have been raised to move closer to (and sometimes above) small group market standards (detailed info included in the materials). The Board debated this and proposed out-of-pocket maximums, which increased along with the copays in the proposal for plan types II and III. In plan type III, out-of-pocket maximums for drugs were eliminated altogether. Members felt that copays for generics should be maintained as low as possible and that out-of-pocket protections are essential for members.
Similar to concerns raised during the affordability debate, the question of why small group standards were used as benchmarks came up again and Turnbull suggested it is more appropriate to look at cost-sharing in large group plans because most individuals in employer plans are in large groups. Board members requested more data and information to compare the value of the current plans to proposed plans, and several members asked about the amount of savings gained through these changes. The staff will work to gather this data for the next meeting.
Emergency Regulations Approval
Before closing, the Board approved final regulations on Eligibility and Hearing Process for CommCare and Affordability for the Individual Mandate. Katz provided a summary of the changes, most of which were technical clarifications reflecting current practice.
Mr. Katz stated the Connector received testimony and comments from a number of organizations and adopted a few recommendations. He stressed that the majority of requests were substantive and CommCare and the Affordability regulations needs more time and consistency under current standards before major changes can be contemplated.
The excitement continues in two short weeks on February 28th. We’ll be there!
Diana Ong and Lisa Kaplan Howe