Connector Board Meeting Report: 10-12-06

At Thursday’s Connector meeting, the Board came close to concluding some familiar issues and started looking to issues next on its agenda. Most of the meeting focused on Commonwealth Care details. During the last hour, the Board began discussing its role in the private insurance market. Despite the new issues, it seems one old problem will never change: the poor quality of the meeting rooms. We were back in the Ashburton Café, where between the loud blower, the busy street, the voices from the room next door and the lack of microphones, it was often impossible to hear what Board members said.

Commonwealth Care Implementation Update
Connector COO Rosemarie Day told the Board Commonwealth Care rollout seems to be going well. 5,229 people have officially been determined to be eligible, and 35 have picked a plan and enrolled. Some Board members wanted to see the enrollment packets, and Rosemarie promised to bring examples to the next meeting. The call center has been averaging 300 calls a day, below the anticipated level of 500 calls a day. Rosemarie suggested a pilot program to try Celia Wcislo’s recommendation that customer service reps call enrollees to help with plan choice.

The staff is working on the Phase II contract with Maximus to address concerns raised at the last meeting. The contract should be ready for Board approval at the November 9 meeting. Rosemarie verified the customer service reps get health insurance and Maximus pays 65% of the premium.

Rosemarie told the Board the Connector is outgrowing its current space, and is close to finding a permanent home (we hope it has a good meeting room). At Executive Director Jon Kingsdale’s request, the Board gave the Administration and Finance committee the power to approve a contract, which Jon expects to cost about $350,000 a year.

Financial projections
Patrick Holland gave a presentation about the Connector’s operating finances. He noted the presentation was based on assumptions, and predicted a $3.7 million shortfall between now and December 31, 2007 (we will post the presentation soon). The Connector expects to break even during 2008. Some Connector’s operating funds come from a 4% charge on the premiums paid to the MMCOs. Ironically, lower than expected premiums mean less operating funds for the Connector.

Regulations
Two major changes were made in the regs from two weeks ago. The first clarified limits on who is eligible for Commonwealth Care (3.09(B)). The staff suggested language to exclude people who can easily get insurance elsewhere, such as dependents who can be covered under someone else’s insurance, members of the military eligible for TRICARE, and students. Celia Wcislo and Chip Joffe-Halpern asked for the regs to explicitly make eligible people who pay for their own non-group insurance, are on COBRA or are in the waiting period for an employer sponsored plan. The Board agreed and, through rapid drafting during the break, the lawyers came up with language. Chip highlighted the importance of making sure customer service reps have the right information about eligibility and know the right questions to ask.

The second major change was adding a premium hardship waiver. The original draft allowed the Connector to waive premiums on four grounds, copied directly from MassHealth regs: 1. homelessness; 2. utility cut-off, 3. medical debt that exceeds 7.5% of annual income; or 4. a sharp unexpected increase in essential expenses. Two weeks ago, the board discussed eliminating the last two reasons, and the staff urged that the high medical debt ground be kept.

In discussion, Jon Gruber worried that specifying a percent of income would set a precedent for determinations of affordability. He said it was weird and improper to compare accumulated medical debt to annual income. Chairman Tom Trimarco did not like the “open-endedness” of the provision and the fact that it was not limited to debt for medically necessary treatments. The Board discussed sending the issue to the Affordability Committee, but decided instead to strike the provision with the understanding that the issue will be revisited during the notice and comment period for the regs.

Other changes included addition of a payment plan provision. Celia wanted to add a provision specifying that the Board may add more hardship criteria later, but Greg cautioned that such a provision would be “void for vagueness”. Tom asked for a motion to pass the regs with “the deletion of that one paragraph” (the hardship waiver), and the Board unanimously approved the regulations. The Board has not yet set a date for a hearing on the regulations.

Actual Enrollee Contributions
CFO Patrick Holland gave a brief presentation (which we hope to post) about the actual enrollee contributions (AECs), which will vary depending on which plan an enrollee chooses. For example, for people in the 100%-150% of fpl range, AEC varies from $18 to $74. Every region will have at least one plan at the lowest premium level, as specified by the Board. Patrick also mentioned that cost varies with location, spurring Chip to suggest that maybe the prices ought not to discriminate based on geographic location. But Jon K said equalizing AECs across regions was not possible given the way the bidding process worked.

Private Insurance Market
Bob Carey gave a presentation (we hope to post this soon) to introduce the Board to private insurance issues. The Connector’s next major task is setting up private coverage options for individuals and small businesses. He began by talking about the determinants of risk and their effect on premiums. Jon K. noted that the Connector is not an insurance company, but it will complement them and must be concerned with risk dynamics: if it attracts only low-risk people, it will drive private insurers’ premiums up; if it has only high-risk people, the Connector will run out of money. Board members and Connector staff extolled the goal of not disrupting the private insurance market.

Bob informed the Board about the effect of the merger of the small-group and non-group markets, which he said was expected to result in a 25% premium decrease for non-group members and a 4% to 5% increase in premiums for small-group enrollees. Bob discussed the guidance the Board ought to give to insurers as it solicits plans to consider for its seal of approval. He recommended that the Board frame the issues and not give too much prescription.

Insurance Commissioner Julie Bowler wanted to make sure that high deductible and non-managed plans remain available as a way to attract young healthy individuals. She decried the impact of the 1996 non-group coverage reforms, which she said drove out many plans to the detriment of the insurance market. Companies like MEGA Life and Golden Rule, for-profit indemnity insurers, are attractive to many and have a role to play. Celia was concerned that the Board may be moving toward too much reliance on high deductible plans, and asked about the impact on the rest of the market of expanding these types of plans. Chip reminded the Board that to attract enrollees the plans must be affordable and offer adequate coverage.

Finally, Bob presented a timeline for Connector actions regarding the private insurance market:

November 2006: Connector issues guidelines
January 2007: Carriers deliver products for Connector review
March 2007: Connector reviews products and issues seal of approval
May 2007: Marketing of plans and Enrollment begin.

Retreat
Jon K made brief mention of the Board’s upcoming retreat, scheduled for Saturday, Oct. 28. The first half of the retreat will consist of educational programs for the Board members. During the second half, the Board will decide how to progress with private insurance plans and how best to coordinate work between the Connector staff and the Board.
No discussion of what to do when gubernatorial candidates Christy Mihos and Grace Ross crash the gates.
Eric Benson