The Connector Board met on Tuesday afternoon to vote on a revised Affordability Schedule, the Seal of Approval for the proposed Commonwealth Choice plans, revised Commonwealth Care regulations, the FY10 Administrative budget and a contract with Perot Systems. The Board discussed the Commonwealth Care budget and proposed savings to the program. Meeting materials are available here.
Although it was widely reported that the Connector voted to eliminate dental benefits now provided to below-poverty members in Commonwealth Care, that did not happen. What did happen is the board made major changes to the CommChoice program for next year, and agreed to administrative changes that are estimated to reduce Commonwealth Care enrollment by 17,655 people. Details after the jump.
Affordability Schedule Revision – VOTE
Connector staffer Kaitlyn Kenney guided the Board through the revised Affordability Schedule. Clarification from CMS caused the Connector to recalculate some of the FPL figures used for eligibility determination. These FPL changes have already been implemented for CommCare eligibility, re-determination, and premium calculation. Kenney explained that the changes are relatively small and translate to $12 or $24. The FPL changes bump some members into different FPL brackets which affect CommCare eligibility and plan type assignment. For example, an individual with income between $16,249 and $16,260 would now be required to pay $39 instead of having no premium. The Board voted to approve the revised Affordability Schedule.
CommChoice: Seal of Approval – VOTE
Patrick Holland, Chief Financial Officer for the Connector then presented staff recommendations for the Commonwealth Choice Seal of Approval. The staff incorporated feedback received from the Board at the June 11th meeting; the Board requested an alternative Bronze B Benefit Design that was similarly priced or less expensive than the Bronze A plan. Holland reviewed the Alternative Bronze B plan design with the Board. The staff recommended awarding the Seal of Approval to seven carriers: Blue Cross Blue Shield MA, CeltiCare Health Plan of MA, Harvard Pilgrim Health Care, Health New England, Neighborhood Health Plan and Tufts Health Plan. A new entrant to the CommChoice market, CeltiCare will offer plans in only Eastern and Central Mass. CommChoice is moving towards more standardization of plan designs – from 27 different benefit designs currently to 9 proposed benefit designs in 2010.
The Connector is also revamping the CommChoice website to make the shopping experience better for consumers. The Connector hopes that the website will help consumers more easily navigate the plan options and make informed decisions about their health coverage. Board member Dolores Mitchell commented that many consumers may not know the definition of a deductible. Holland responded that the Connector is working on educational materials to clearly explain cost-sharing terms to consumers and help people understand out-of-pocket costs. The Board discussed how the website could be designed to allow consumers to compare plans across tiers and carriers most effectively.
The Board also raised concerns with the $50,000 annual benefit maximum in Young Adult Plans. The staff recommends allowing carriers to determine if they want to incorporate a benefit maximum in their YAP plans. The Connector will re-consider the YAP benefit max if QSHIP (Qualifying Student Health Insurance Plans) regulations change. Board member Nancy Turnbull inquired about DHCFP’s timeline to changing QSHIP regulations; Kingsdale answered that DHCFP might reconsider the regulations this fall. Board members Dolores Mitchell and Nancy Turnbull strongly criticized the $50,000 benefit max. Holland explained that the benefit max was a trade-off to containing the premium costs. According to the CommChoice carriers eliminating the benefit max would increase premiums by 13%.
In their two years of experience no young adults have reached their benefit max. Board member Ian Duncan cautioned that the Connector can’t draw conclusions from the experience of only about 4,000 – 5,000 members in the YAP plans; Duncan stated that he supports a higher benefit max. Duncan also stated that a 13% premium increase translates to about $20/month. Mitchell challenged the validity of the 13% premium increase estimate. The Board debated the benefits of keeping premiums low versus raising or eliminating the benefit max. Board members Rick Lord and Secretary Leslie Kirwan supported the need for affordable options for young adults. The Board decided to re-visit the issue of a benefit max in YAP plans next year and the staff promised to provide more information about potential changes in cost-sharing with the elimination of the benefit max.
Holland then explained that premium trends for Connector products are consistent with the outside market and explained the actuarial values of the Bronze, Silver and Gold-level plans. The Board also discussed the need to conduct further market research to help the Connector better understand how consumers choose plans. Nancy Turnbull expressed concern that the 2010 CommChoice plans offer too many choices and are confusing to consumers; she urged the Connector to work on the website to help people navigate all of the plan choices. The Board voted to grant the Seal of Approval to the selected carriers to sell Commonwealth Choice plans.
CommCare Budget Update
Secretary Leslie Kirwan prefaced the CommCare budget discussion with information about the state budget process. Secretary Kirwan reminded the Board that the Legislature’s final budget emerged from the conference committee last week and the Governor released a revised budget earlier this month. Since the original budget was formulated in Janaury, enrollment has exceeded expectations, and revenue has dropped sharply.
Kirwan outlined some of the differences between the conference committee budget and the Governor’s revised budget. Kirwan stated that the Administration tried to preserve CommCare eligibility for special status legal immigrants. The revised House 1 budget allocated $840 million in spending for CommCare, with $110 million in savings. The conference committee accepted the Governor’s savings estimates and allotted only $723 million for CommCare. According to Kirwan, the Governor is now evaluating options for CommCare spending but wishes to preserve eligibility. Kirwan reported that the Governor will not sign the sales tax increases in the budget without ethics reform. Even if the sales tax increase passes, hard budget choices remain.
Kirwan explained that coverage of immigrants with special status is not possible without CommCare savings such as stopping auto-enrollment and auto-re-assignment. Patrick Holland walked the Board through the CommCare budget update. The Connector needs to address both reduced state revenue and membership growth (176,998 members as of 6/1/09). FY09 year end enrollment is slightly higher than expected which has a significant potential impact on the FY10 budget. Rick Lord questioned whether CommCare members could be covered through other assistance programs such as the MSP and the federal COBRA subsidy. CommCare Director Melissa Boudreault explained that the integrity of the CommCare program is intact and that the increased enrollment is a factor of the economy. Boudreault listed three reasons that explain the increased enrollment: full-time workers shifted to part-time, part-time workers losing hours and jobs and becoming income-eligible and young people graduating from school without jobs or jobs that offer coverage. Holland explained that action is needed for the CommCare program to live within its budget without capping enrollment. Capping enrollment is not a feasible option because of the maintenance of effort requirement to receive federal stimulus funding. The Connector’s proposed solutions for the FY10 budget are:
- Slow enrollment growth from 20% above year end 2009 enrollment to 9%, though changes in the auto-enrollment process à savings of $62.5 million
- MCO risk-sharing à savings of $32.2 million
- Plan Type 1 Dental benefit à savings of $10.3 million
- Connector Contribution à savings of $9.4 million
Beginning July 1st the Connector is proposing to end auto-enrollment, meaning that eligible but not enrolled CommCare members in non-premium paying plans will not be assigned to plans and therefore not be able to access coverage if they do not select a plan. This applies to new enrollees, and to former members who lose their coverage. Holland stated that this was a painful decision for the Connector to make. Boudreault informed the Board that about 1,400 members are auto-enrolled or auto-assigned to CommCare plans each month. With the suppression of auto-enrollment these members will remain in the eligible but not enrolled category.
Boudreault reminded the Board that uninsured residents under 150% fpl are not assessed a tax penalty. Secretary Kirwan added that eligibility for CommCare remains intact and almost all benefits have been preserved. The Connector will continue outreaching to members, monitoring enrollment and encouraging eligible but not enrolled members to select a plan.
em>CommCare Regulation Revisions – VOTE
Connector General Counsel Jamie Katz presented the emergency revised CommCare regulations to the Board. The Connector staff has proposed revised language for the CommCare regulations. The updated language provides the Connector with the discretion to shut off auto-enrollment for members previously enrolled in the program. Katz added that a hearing on the revised regulations might be held in late July, but the emergency regulation would take effect immediately. The Board voted to approve the revised CommCare regulations.
FY10 Administrative Budget – VOTE
Patrick Holland and Rick Lord presented the FY09 Administrative Budget update and the FY10 Administrative budget recommendation to the Board. Holland explained significant variances in expenses in FY09 due to fewer appeals than expected and less spending on the CommCare call center, staff salaries and benefits and consulting and professional fees. The FY10 recommended administrative budget accounts for a $181,897 increase in salaries and benefits (due to four new budgeted positions), a $549,393 increase in appeals (a 30% expected increase in the number of appeals), a $1,668,565 decrease in CommCare customer service spending, a $908,394 increase in spending for CommCare enrollment and eligibility, a $327,000 increase in GASB 45 funding (post-employment benefits other than pensions) and a $2.5 million increase for IT enhancements. Holland noted that the Connector staff has developed a range of revenue estimates for FY10 because of the fluidity of the state budget. The staff is also recommending a $5 million cash transfer to the CommCare Trust Fund from the Connector reserves to address the CommCare budget shortfall. The Board voted to approve the staff recommendations for the FY10 Administrative budget.
Perot – VOTE
Finally Melissa Boudreault reviewed the Perot Systems task order. Perot Systems is the Connector’s customer service vendor. The Connector staff requests that the Board authorize its Administration and Finance Committee to review and approve the Connector entering into a new task order between the Connector and Perot Systems. This task order will facilitate the implementation of a new premium billing system for CommCare. The Board voted to delegate the vote on the Perot Systems task order to the A&F Committee.