The Connector Board held their first meeting of the new year last week. Agenda items included quarterly program updates, the proposal to work with the Small Business Service Bureau to provide coverage to very small employers, the Connector’s administrative budget, and an Administration & Finance committee report. All Board members were present, with Nancy Schwartz representing the Commissioner of Insurance and Celia Wcislo on the phone.
Materials from the meeting are here; our full report is after the jump.
Executive Director’s Report
Jon Kingsdale opened the meeting by announcing that the Connector – in collaboration with DHCFP, ANF, and Board of Higher Education – is working to improve the Student Health Insurance Program by exploring a joint procurement process for state schools. Kingsdale, Nancy Turnbull, and Rosemarie Day are part of a committee looking at this option.
Kingsdale reminded the Board about the national conference the Connector is holding January 21-22. The first day is on cost containment and payment reform, and is open to Massachusetts folks. Stuart Altman, Don Berwick, Senator Richard Moore, and Representative Harriett Stanley will be among the presenters. The second day is reserved for high level representatives from other states to learn about the Connector and Massachusetts implementation — with the goal of informing how health insurance exchanges will work in national reform. The Connector expects 125 people from 42 other states and the District of Columbia to attend.
CommCare & CommChoice Quarterly Updates
Before she began her presentation on the quarterly updates, Rosemarie Day announced some staff additions at the Connector. The new Director of CommChoice is starting on Tuesday and the Connector is interviewing finalists for the Director of CommCare position. Kingsdale announced that the Board will address CommCare procurement, budget projections, and affordability during the (two) February and (one) March meetings.
Commonwealth Care Update
Rosemarie Day gave the Board an update on the enrollment trends and program activities of the Commonwealth Care program from October-December 2009. Most of the data presented included information about CommCare members who are not “special status” legal immigrants, saving a separate section to talk about CommCare Bridge. Some Board members were surprised by the modest growth in the CommCare program, especially given the current economic climate. Day commented that this may be due to the federal extension in unemployment benefits and COBRA, which has led to a dramatic increase in Medical Security Program enrollment.
Commonwealth Care saw a slight overall increase in enrollment from October to December, 2009, with 150,998 now enrolled. CommCare has had a 2.6% (non-AWSS) net enrollment growth over the past two quarters, compared with a 1.4% increase in MassHealth enrollment and a much larger percentage growth in MSP. The majority of the CommCare growth is in truly “new” members (~4,000). Within the program, there has been a slight decrease in Plan Type 1, membership largely explained by removing AWSS. There are 26,127 legal immigrants currently enrolled in the Bridge program.
Day then discussed current CommCare program initiatives. She began by recognizing the immense efforts of Connector, Administration & Finance, and MassHealth staff to create the CommCare Bridge program: “one of the fastest things we have ever done.”
Day offered information on the new CommCare billing system, which is expected to be completed in May of 2010, with improved online tools (e.g. e-pay) to increase members’ access to their accounts. The call center is experiencing an increased call volume, with many calls regarding Bridge; there is an established special unit to answer Bridge questions. In the Individual Mandate category, the Connector is beginning to send out 1099-HC forms to members over 150% fpl.
The Board discussed the performance standards set forth in the contract with Perot, the company that runs the Connector’s customer service call center. The call center now has better online tools enabling customer service representatives to see what letters have been sent to members and other relevant account information. Perot is required to submit daily and monthly reports to ensure quality standards are being met.
Commonwealth Choice Enrollment
Next, Day presented an update on Commonwealth Choice enrollment. She noted that there has been continued growth in all CommChoice products, with an increase of about 1500 subscribers between October and December, and most of the growth in non-group plans. There has been a 160% growth in the contributory plan for small businesses from July to now. She also presented a breakdown of subscribers by Bronze, Silver, and Gold levels. Importantly, about half of all members have stayed with the Choice program for over a year.
Nancy Turnbull requested a breakout of demographics relative to different amount of time in a CommChoice plan. For example, are people who stay on CommChoice for 2 years or more of a particular age group (e.g. 50-64)? Day responded that the Connector has the ability to do that, but hasn’t broken down the data to that level.
The Board also had a long discussion about CommChoice marketing/advertising strategy. The Connector engaged in a TV and digital marketing campaign in the fall, and is in the process of analyzing how effective that campaign was. The Connector has been giving new subscribers the opportunity to fill out a survey about where they heard about CommChoice. Rick Lord commented that he is surprised that 0% of the respondents heard about CommChoice from their employers, especially given that employers are the ones who set up the capability for employees to choose a Section 125/voluntary plan. Day responded that the Connector just started the survey and are only surveying new subscribers.
Small Business Transition Opportunity
Next, Rosemarie Day and Patrick Holland presented information about the Connector’s partnership with the Small Business Service Bureau (SBSB) to offer a more affordable insurance option for “mini-employers,” businesses that have 1-5 employees. They began this discussion at the last meeting (see our previous blog, and this Globe blog post).
There will be a phased transition of accounts from SBSB to the Connector; 1200 subscribers will be transferred on April 1, 2010, and 15,800 will be transferred on April 1, 2011. The success of the partnership with SBSB relies on utilizing economies of scale. That is, increasing CommChoice subscribers from mini-employers will spread advantages (e.g. lower premiums and admin fees) to all CommChoice subscribers. The Connector is hoping to break even on CommChoice within the next two years.
Goals of the alliance with SBSB are to reduce employer costs, streamline administrative processes, and reduce Connector’s costs. The Connector expects to reduce administrative fees from 4.5% to 3% in five years and reduce administrative charges to small employers from $35 per subscriber per month (pspm) to $10 pspm. CommChoice membership will increase from 21,000 to 52,000 by FY2015. The Connector is putting out an RFP for a “check bid” to see if other entities can offer a better deal; if not, the Connector will go with this plan.
With the exception of Rick Lord (who recused himself from the conversation and vote due to a conflict of interest) and Ian Duncan (who opposed the changes with without a more thorough bidding process to make sure the Connector’s getting the best deal), the Board voted to approve the SBSB contracts.
Administrative Budget Update
Due to time constraints, Patrick Holland quickly reviewed the FY09 audit and the FY10 administrative budget projections. Holland estimates that the Connector will see a $460,000 loss in FY10. Therefore, Connector staff are exploring whether they can find cost savings in staff retirement benefits, IT enhancements, and CommCare enrollment.
Administration & Finance Committee Follow-up: Crosby Report
Rick Lord presented on behalf of the A&F Committee. The Crosby Report is an analysis of staff compensation in quasi-public agencies. Lord says the committee is reviewing the Crosby report recommendations, and have decided to go forward with the recommendation to do a comparability analysis of senior staff salaries.
-Suzanne Curry and Lindsey Tucker