At the Connector Board’s first annual meeting today in Andover, CEO Jon Kingsdale called the Connector Authority a “tough, start-up, competitive business enterprise,” and warned board members “the pace is about the accelerate.” Kingsdale outlined 13 key decisions and initiatives between now and mid-2007:
1. Agree on objectives for Connector policy and business and develop the framework and structure of Commercial offerings, including number of plans, range of benefits, how employers can access offerings, etc. (Now thru Nov. 9)
2. Define “minimum creditable coverage” & the young adults plan. (Nov./Dec. 06)
3. Specify plan selection, rating, underwriting, and other rules of participation for individuals and small employers, such that carriers have incentives to bid for the Connector and promote this distribution channel. (Now thru Feb. 07)
4. Specify criteria for evaluating proposals from carriers, evaluate proposals against criteria, select Commercial offerings for Seal of Approval, and manage relationships with approved plans. (Nov. thru May 07)
5. Define role and responsibilities of the sub-connector(s), criteria for evaluating proposals, select sub-connector(s), and implement. (Nov. thru May 07)
6. Develop Commercial marketing/sales plans for Connector, including target segments, value proposition for each segment, sales channels/approach, advertising, etc. (Nov. thru May 07)
7. Develop regulations regarding statutory requirements of employers with over 10 employees to establish and maintain Section 125 plan for their employees. (Jan. thru April)
8. Develop sales program and incentives, including brokers. (Feb./March 07)
9. Specify rules for subsidizing Commonwealth Care through employer contributions (above & below 33%/20%). (March 07)
10. Develop policy and criteria for waiving the individual mandate on affordability grounds, including appeals. (March thru May 07)
11. Evaluate, refine and promote the Commonwealth Care program in the context of an individual mandate to have insurance. (June thru August 07)
12. Develop interactive, state-of-the-art portal and website for consumer selection of health plans. (Nov. thru May 07)
13. Evaluate Connector’s first year, propose legislative changes, help renew the Medicaid waiver, and provide input to the new free care pool rules. (June/July 07).
Whew, hefty! Kingsdale framed the Connector’s work in sharper terms than we’ve heard before: “We are literally in the business of selling insurance,” and “We are in the insurance selling business,” and the Connector will be “competing and cooperating with brokers and intermediaries.” Far more ambitious than the prior descriptions by Health and Human Services Secretary Tim Murphy who analogizes the Connector to enabling functions played by the New York Stock Exchange.
A Connecticut Yankee in Kingsdale’s Court
The Board received a presentation from Phil Vogel who runs the “Health Connections” program of the CT Business and Industry Association. Kingsdale suggested Vogel’s program is the most “Connector-like” entity in the country and by far the most successful, servicing 88,000 covered lives and 5800 employers – most with under 10 workers. It does all the grunt administrative work for participating employers, and provides their workers with a broad set of plan choices via four carriers.
Board members were mighty interested in Vogel’s model as is Kingsdale who said the entire Connector staff will spend a full day in CT to get deeply acquainted with the program. So it’s a model for the reason of their interest alone. Some important differences – the CT program only services employers while the MA Connector needs to do substantial business enrolling individuals whose employers don’t offer coverage. Also, the CT program is a 100% private entity – the Connector is owned by the public. Click here for the CT site – we’re all going to be learning more about this so start now!
The Bela the Ball
Insurance Actuary Bela Gorman introduced the Board to “risk selection issues” as the Connector dives into the private insurance market – arcane and important stuff in the next phase of reform. Done wrong one way and the Connector-approved products will bounce like a lead balloon. Done wrong another and the existing private insurance market could be severely disrupted. Done wrong another way and the quality of coverage could be markedly degraded. And that’s just the start.
Bela’s conclusions: Selection (especially the adverse variety) occurs whenever there’s choice. Selection can also occur through distribution. Participation requirements (i.e. the Individual Mandate) can help to limit selection problems and improve the risk pool for everyone. Her final recommendation in response to a question: minimize the number of options offered to minimize adverse selection and market destabilization.
Fishbowls and Fiduciaries
Lots of quality time in the afternoon discussing board and staff roles. Some revealing and noteworthy comments.
Board Member and Insurance Commissioner Julie Bowler opined on the limitations of being a public board and the pressures of being in a “fishbowl… every word we say is out there and that can have a dampening effect.” At the Division of Insurance, she described, she meets behind closed doors with staff and “we make decisions all the time.”
Kingsdale suggested a tension for some board members “between your fiduciary responsibility to the Connector and your duty of loyalty to your constituency group.”
Board Member Celia Wcislo expressed frustration with the scope of decisions being placed on the board in such a short period of time. Kingsdale replies: “…one year from now we’ll know a lot more than one month from now. But we have to make these decisions in one month.”
Because the Connector wisely decided earlier this week to open up the meeting to the public, Independent Gubernatorial Candidate Christy Mihos, who made a stink about the planned closed session, lost his chance to engage in guerrilla theatre. He showed up around 8:30am, stayed for an hour without making and comment, and quietly left at the break. The meeting should have been open, and Christy deserves thanks for making the point in such a public way.