The Connector Board met today to determine details of its RFR for its coming commercial insurance products, now christened “Commonwealth Choice.” The board discussed the Policy Subcommittee’s recommendations and got hung up on questions of whether the Board had to set standards for Minimum Creditable Coverage (MCC) today, where the Board should set MCC, and whether MCC should include drug coverage. At the end, the Board compromised, adopting the subcommittee’s proposals and other options, requiring the Board to revisit these difficult issues in January.
Commonwealth Care update
Rosemarie Day told the Board 30,000 people have been found eligible for Commonwealth Care and 15,000 have been enrolled. Call volume at the customer service center has been increasing and they will hire more customer service staff by January. Rosemarie promised a plan of operations including a schedule of important decisions and activities for the next six months. Staff is on pace for phase II (Commonwealth Care for people with incomes between 100 and 300% fpl). Rick Lord asked how the Connector will identify people eligible for phase II. Rosemarie responded they estimate 72,000 eligible people are now in the Uncompensated Care Pool and 30,000 are now uninsured, so phase II will require more marketing and outreach than phase I.
The Board spent most of the meeting discussing standards for Commonwealth Choice. Chairman Tom Trimarco applauded the Policy Subcommittee for its recommendations and Jon K gave his interpretation.
Bruce Butler, Subcommittee Chairman, explained the recommendations. There will be three plan levels 1. Premier: comprehensive with modest co-pays and no deductibles. 2. Value: plans covering between 72.5% and 87.5% of what Premier covers. 3. Minimum Creditable Coverage: plans covering 60% of what Premier covers. Each carrier can offer two premier plans, three value plans and two MCC plans. The Board will allow carriers to offer alternatives to the standard, as long as they are within required premium levels and satisfy content restrictions. For example, MCC plans must include inpatient, outpatient and drug coverage, and may not have deductibles over $2,700 or out of pocket maximums more than $4,000. Plans must offer four pre-deductible primary care visits. More details available by clicking here and clicking here for Jon K’s memo.
Jon K noted the importance of MCC as a way to tell insurers “below this ye shall not go.” Any plans below MCC will not satisfy the individual mandate. Jon K recognized this will limit consumer choice and require many people to change insurance plans, but said he nonetheless supports the proposal. He said although the Board would not set MCC standard today, it should determine MCC to give guidance to carriers as they develop proposals. He argued the Connector must offer MCC plans to be competitive with other distributors and avoid adverse selection.
Beth Waldman suggested the Board should not rush to set MCC because setting MCC too high will force people to buy more expensive coverage. Chip Joffe-Halpern responded that setting MCC too low would “dumb down” insurance, leaving more people underinsured. Jon Gruber added that MCC is less of a burden on people who already have low cost coverage than on people who don’t have any coverage and people in low benefit plans are already paying a lot for poor coverage.
Bob Carey estimated that 30,000-40,000 people would have to buy up to meet the proposed MCC. Most are in the non-group market, and the nongroup/small group market merger will decrease their premiums so they may end up paying less for more comprehensive coverage that satisfies MCC than they pay for current coverage.
Julie Bowler argued that drug coverage should not be included in MCC. She thinks people should have choices and not be forced to purchase drug coverage. Julie thought since the legislature debated the issue and didn’t resolve it, the Board should not act on it. She said what the Connector plans provide is not insurance, but prepaid health care and objected to compelling people to buy something that goes against their expected needs.
Most others disagreed. Chip said that insurance is supposed to protect against unforeseen problems, so we shouldn’t place too much store in an individual’s assessment of expected costs. Celia Wcislo agreed that the Board may force people to buy something they won’t use but that it’s good for them to have just in case. Jon G argued that insurance must cover three essentials (doctors, hospitals and drugs), and said carriers can set up cost sharing on drugs such that including a drug benefit doesn’t make much difference on premiums. Dolores Mitchell said drug costs have gone up “not just because pharmaceutical companies are making huge profits, but because the drugs do amazing things;” because drugs cost more than they used to, insurance should cover them. Tom said the legislature intentionally passed this and other issues they couldn’t resolve to the Board for resolution. Bruce said it was important to focus on the effects of its policies on the population as a whole rather than on individuals who may not want a certain benefit.
Tom spoke briefly about the letter the Board received from Rep. Walrath and Sen. Moore, which said that the Policy Subcommittee’s recommendations may violate legislative intent (see 11/29 blog). The letter called for premiums of $320 per month and maximum deductibles of $1,000. Tom said the legislature intentionally passed decisions to the non-political Board and suggested the letter was disingenuous in arguing that the interpretations of two legislators represented those of the entire legislature.
The Board seemed at an impasse, and was unable to resolve whether to include drug coverage in MCC and whether MCC standards should be established now. Tom called for a break, giving members time to negotiate. After the break, a compromise was presented and adopted. The Board adopted the Policy Subcommittee’s recommendations with four conditions:
1. Low end products offered through the Connector will not necessarily set the standard for MCC.
2. The RFR will ask carriers to submit low level plans assuming that MCC plans include drug coverage and MCC plans can, but don’t have to, exclude drug coverage.
3. The RFR will ask carriers for proposals with premiums at $320 per member per month (in response to the Walrath and Moore letter).
4. Once MCC is set, carriers can change their low level plans to comply with MCC.
The compromise means the Board has put off deciding MCC standards until it receives feedback from the carriers in January. The compromise leaves carriers with more work and less guidance, lightens the Board’s workload, and gives the Board more information when setting MCC. It also postpones this key decision to the Patrick Administration when a number of ex-officio board members will likely be replaced.
Hearing on Commonwealth Care regulations
The Board discussed the 11/15 hearing about Commonwealth Care regulations (see 11/19 blog). Chip and Lou Malzone, the only Board members who attended the hearing, gave their impressions. Chip noted that Commonwealth Care is an experiment and the Board will have to revisit its decisions next year. Lou told the story of a woman who worked for 25 years, lost her employment and her health insurance, now has medical problems, a low paying job, and not enough income to afford Commonwealth Care. Lou reminded the board that “but for the grace of God” any of them or their family or loved ones could be in that situation. He said the real purpose of the Connector is to help people in that situation by providing quality affordable insurance.
Jon K said the Board should be ready to finalize regs at its 12/14 meeting, although he offered (jokingly) to schedule a fallback meeting for December 25.