Today members of the Connector Board’s Affordability Committee and a few hard-core Connector groupies traveled to Shrewsbury. With all of Bruce Butler’s talk of signposts, directions and parking lots, it felt like we were starting a journey. Between the heat and gas prices, I’m reluctant to travel too much, but there was one advantage of the trip: with only eight audience members, there were finally enough chairs.
The Connector seems to be making some headway, setting firm dates, and developing substantial positions. Jon Kingsdale said the Board will have to make decisions about affordability and premium assistance at its August 17th meeting. Kingsdale also distributed a draft outline of proposed benefits for CCHIP plans based on his discussions with MMCOs. Unfortunately the outline is thinner than MassHealth Essential and proposes copay ranges that could be quite high. (The benefits outline along with other materials distributed are available here)
Committee chair Bruce Butler noted that the Committee’s role is to give guidance to the Board, not to make decisions. To that end, the Committee did not make any substantive decisions. Rather it decided that it would present info to the Board next week, then investigate the topic further and present the Board with two or three options to choose from on August 17th. The key guideposts for each option will be the CCHIP premium for the bottom end of eligibility, 100% of the federal poverty level (fpl), and the premium for the high end, at 300% fpl. Then drawing the line in between the two will be possible.
The Committee spent most of the meeting discussing a draft of Jon Kingsdale’s presentation for August 3rd, which is meant to be a road map to guide the Board through calculations of enrollee contribution and premium assistance. The Committee talked a lot about who will have to make up the difference in costs if an enrollee opts for a plan other than the lowest premium plan in an area. Celia Wcislo argued that the state should pay the same percentage of cost, no matter which plan the enrollee chooses, while Kingsdale’s presentation assumed the enrollee would pay the full difference between the cost of the lowest premium plan and the chosen plan. Kingsdale admitted that this structure is meant to drive people into low premium plans. Celia worried that the lowest premium plans would be low quality and have high cost sharing. The other members responded that regulating benefits, cost sharing, and networks could preserve quality. In the end, the members decided that Kingsdale should present Celia’s concerns along with his proposal.
Note that the draft presentation presents as an example premiums ranging from $20/month to $135/month. Kingsdale emphasized that this was done as an illustration of the math and that he “pulled numbers out of the air.”
Which Path to Choose?
The Committee also discussed a memo by Jon Gruber regarding three methods of estimating affordability. The first method was to calculate how much money an enrollee needs for necessities; the amount left over is then available for premiums. Gruber said he liked Paul Dryfoos’ methods of estimating the necessary costs for a family, but disagreed with some estimates; primarily Dryfoos’ estimation of costs for child care. The second method, Gruber’s preferred method, was to look at what people actually spend on health care. Although he admits that his data sources are not ideal, he concluded that it is reasonable to require people at around 200% of fpl to pay 5% of their income toward health insurance. This would mean premiums of about $82.00 per month for an individual earning $19,600 a year, although later Gruber modified this to mean that total out of pocket costs including premiums should not exceed 5% at the middle of the CCHIP income range. A third method, which was less appealing to Gruber, was to refer to premiums charged in other government programs.
Everyone concluded that there many tough issues involved (Kingsdale called it a morass) and that finding the best answer may be impossible in the short time available.
The Committee next discussed the premium contributions required by other states’ insurance plans for low income people. The most common range of premium contributions seemed to be approximately 1-6% of income. Celia noted that the most successful plans have no co-pays for preventive care and below market co-pays for other services.
Upcoming Tour Dates
The Committee plans to meet again on August 3rd after the Board meeting in Boston. Then they will meet on August 10th in Lowell, followed by a return to Boston on August 17th for the full Board meeting to approve draft premium regulations. This will permit a hearing on the premiums on September 25, and final approval on September 28, two days before the legal deadline. When faced with the meeting schedule Gruber said, “this is destroying my summer vacation.” To which Kingsdale responded, “welcome to my life.” Life is tough when you’re in such high demand.
written by HCFA’s Eric Benson