The Commission on the Small/Nongroup market merger will meet this Thursday, 10 to 11:30am at the Division of Insurance at One South Station. Check out the Agenda below. Doesn’t look as enlightening as earlier meetings, though still worth attending to hear what they say about research assumptions. These meetings are a great opportunity to learn the complexity of what may happen to the private insurance market post merger, post mandate, post creation of Connector products.
Agenda:
1. Data retrieval update
2. Initial data analysis (summary tables)
3. Assumption review for baseline forecast

One week after the Attorney General’s office filed suit against MEGA Life, more examples of the failures of low cost/minimal benefit plans are emerging. Christopher Rowland’s article in today’s Globe details hardships inflicted on subscribers of those plans. High deductibles and copayments, benefit restrictions, and low coverage caps lead to huge medical bills for individuals they “insure.” Worse yet, the failure by MEGA Life agents and its sister plan, Mid-West National Life to disclose plans’ coverage limitations means subscribers don’t know the costs facing them until it’s too late.

Concerns about skinny health plans are being raised during a timely phase of health reform implementation. The Connector Board is now deciding what types of products it will offer to individuals and employees of small businesses. They are also deciding what will qualify as insurance for the individual mandate. The decisions facing the Board require delicate balancing - while it is important for the Board to offer individuals and small businesses affordable coverage, the plans must also provide meaningful coverage. The stories about MEGA Life show that skinny coverage turns out to be far from affordable as well.

HCFA’s indefatigable law firm — Health Law Advocates — has submitted recommendations to MassHealth to ensure minimal disrupture of eligibility due to the new federal requirements for citizenship documentation. This summary was provided by HLA’s Sara Pic Harrison:

A new federal law now requires U.S. citizens applying for Medicaid, either as a new applicant or as part of eligibility redetermination, to prove citizenship and identity through rigid documentation requirements. These requirements are burdensome and sometimes prohibitive for many Medicaid applicants otherwise eligible. For example, African-American citizens born in the South during the era of Jim Crow laws usually did not have access to hospitals that provide certificates of birth. Many homeless people do not have driver’s licenses or ID cards. Even the cost of birth certificates can be too much for some families, often $25 or more. For a lower income families with several children, obtaining birth certificates for each child is expensive.

Some states have responded by amending their own laws to make this requirement less burdensome. In Massachusetts, MassHealth will pay for the cost of birth certificates for applicants who were born in Massachusetts, and has extended the time it allows applicants to gather required documents before denial or termination. While we commend the Commonwealth for these, more needs to be done to ensure that eligible citizens are not denied or terminated from MassHealth due to problems obtaining citizenship and identity requirements. HLA, HCFA’s legal arm, submitted comments to MassHealth recommending:

· Requiring MassHealth staff to help applicants and members who experience difficulty obtaining required documents when the applicant or member requests assistance.

· Requiring MassHealth staff to affirmatively offer help to all applicants or members with special needs such as disabilities or homelessness.

· Offering payment assistance to MassHealth members and applicants unable to afford the cost of out-of-state birth certificates.

· Allowing MassHealth applicants or members who are trying in good faith to obtain the required documents to be eligible for free care.

· Tracking how many otherwise eligible MassHealth members or applicants are terminated or denied benefits only because of inability to obtain required documents.

We hope MassHealth will listen to the needs of the low-income people it serves and do everything it can to reduce the burden of the new federal requirements.
Sara Pic Harrison

The Kaiser Family Foundation released a new report today on “The Role of Consumer Co-Payments for Health Care: Lessons from the RAND Health Insurance Experiment and Beyond.” The report was written by MIT economist Jonathan Gruber.

Faithful followers of this blog and MA health reform know Gruber is a board member of the MA Connector Authority, the key reform entity now designing non-subsidized insurance plan offerings for release next summer. Because of this, his report especially demands attention.

RAND remains today the largest social science experiment in US history. It proved there is a demand curve for health services, and that charging various levels of cost-sharing would influence that demand. It also found that for average folks, the decline in consumption did not adversely affect health status. It also found that for some lower income folks, especially those with chronic illness, cost sharing did have an adverse impact on health status. Recent research has not contradicted these core findings.

Gruber’s report is a good summation of the evidence, and draws implications for today’s challenges — he doesn’t mention MA health reform, but the connections are inescapable:

1. Cost sharing can reduce spending without harming the typical person’s health.

2. Income-related cost sharing is better than non-income related cost sharing.

3. Co-insurance should be targeted to promote effective health care use.

4. Some approaches — such as service caps and health savings accounts linked with high deductible plans — carry significant problems.

Definitely worth a read. Click here for the full report.

New report out yesterday from FamiliesUSA — click here to get full report. Here are press release excerpts:

Health care premiums rose an estimated 6.4 times faster than earnings for MA working families from 2000 to 2006. In that six-year period, health care premiums rose by 69.2 percent, while median earnings rose by only 10.7 percent. Among the key findings:

For family health coverage provided through the MA workplace, annual health insurance premiums in the 2000-2006 period rose from $7,341 to $12,419—an increase of $5,078, or 69.2 percent. Between 2000 and 2006, the median earnings of Massachusetts’s workers increased from $30,964 to $34,292, or 10.7 percent.

…the disproportionately high increases in insurance premiums occurred despite the provision of “thinner coverage” to workers—coverage that offers fewer benefits and/or that comes with higher deductibles, copayments, and co-insurance. As a result, Massachusetts families are paying more but receiving less health care coverage.

“Massachusetts families have been hit hard in the pocketbooks due to skyrocketing health costs and stagnant wages,” said Ron Pollack, Executive Director of Families USA. “As a result, Bay Staters are paying much larger portions of their paychecks on health care, and health care is becoming less and less affordable.”

The key findings in the report provide data concerning premiums for family health coverage as well as individual coverage. They also break out the premium costs paid by employers and those paid by employees. The key findings include: For family health coverage in Massachusetts, the employer’s portion of annual premiums in the 2000-2006 period rose from $5,829 to $9,140, an increase of 56.8 percent. For family health coverage, the worker’s portion of annual premiums rose from $1,512 to $3,279, an increase of 116.8 percent. For individual health coverage, the employer’s portion of annual premiums rose from $2,183 to $3,829, an increase of 75.4 percent. For individual health coverage, the worker’s portion of annual premiums rose from $536 to $1,043, an increase of 94.6 percent. …

The Families USA report is based on data from the U.S. Census Bureau, the U.S. Department of Labor, and the U.S. Department of Health and Human Services.

Gov. Romney signed the technical corrections bill into law this past Thursday. As legislators indicated all along, it’s strictly non-substantive and non-controversial changes to Chapter 58 signed last April. The new law is chapter 324; and will be online here:

http://mass.gov/legis/laws/seslaw06/sl060324.htm — click here

It’s now been posted.

News from this past week from the Kaiser Daily Brief:

The Pennsylvania House on Tuesday voted 176-19 to approve a compromise bill that would expand eligibility for the state’s SCHIP program to thousands more children. Under the bill, children of families with annual incomes of up to 300% of the federal poverty level — about $60,000 for a family of four — would be eligible for coverage, but would be required to pay a portion of the premium. Children of families that meet certain criteria, such as having health problems that prevent them from obtaining private insurance, and have annual incomes above 300% of the poverty level also would be eligible but would have to pay the full premium. Republicans lawmakers wanted to limit the expansion, maintaining that families who could afford private insurance would enroll in the program and that businesses would reduce coverage for employees’ children as a result. The bill was passed without any debate and now moves to Pennsylvania Gov. Ed Rendell (D). Top aides have indicated that Rendell will sign the bill.

MA health reform approved in April also increased kids’ eligibility to 300% fpl. Next September 30, the 10-year-old federal statutory authorization for SCHIP expires. We are counting on a vigorous fight to extend and expand SCHIP to cover all uninsured kids. And we’re looking forward to it…

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.”

Heeeeeerrrrreee’s Christy!
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.
John McDonough

Two interesting items in today’s news:

1. Kaisernetwork Health Policy Report reports that former federal HHS Secretary Tommy Thompson “told reporters that states likely will take the lead on health care reform in the absence of federal action, CQ HealthBeat reports. According to Thompson, regardless of whether Democrats take control of Congress after the midterm elections, federal action on health care likely will not occur until 2008, when he expects the issue to play an important role in the presidential election. He also said that at least 20 states likely will follow the lead of Massachusetts and pass laws to require residents to purchase health insurance.”

2. Jeff Krasner reported in the Globe that Massachusetts

“boasts three of the country’s top four health plans, according to rankings being released today by the National Committee for Quality Assurance, a respected Washington nonprofit.

“Harvard Pilgrim Health Care, the state’s second-largest health plan, with about 1 million members, is ranked number one for the second consecutive year.

“Tufts Health Plan, the third-largest in Massachusetts, improved its ranking from third to second place. And Blue Cross and Blue Shield of Massachusetts, the largest plan, with about 3 million members, went from fifth place to fourth.

“… Fallon Community Health Plan, which is strongest in Central Massachusetts but is expanding into Eastern Massachusetts, also performed well. It is ranked 11th, down from ninth last year.”

The best comment on the significance of the high rankings was from NCQA’s John Friedman: “If all health plans performed at these levels, we’d save thousands of lives a year.”

Brian Rosman

Two piece of news today from the Connector Authority:

First, the Saturday Connector Board “retreat” will now be the Authority’s annual meeting and it will be open to the public.

Second, the Connector Board will hold a public hearing on Wednesday, November 15th at 1:00p.m. in the Gardner Auditorium at the State House. The hearing will cover proposed regulations—956 CMR 3.00: Eligibility and Hearing Process for Commonwealth Care.

Here’s the agenda for Saturday (subject to change; it was distributed several days ago when it was still a “retreat”):

Connector Board Retreat: Saturday October 28, 2006
8: 00 AM – 2:30 PM
Action For Results, Inc Board Room
200 Andover Street, Andover MA

Session Goals
1. Provide overview of commercial health care practices and challenges (administration, pricing, underwriting) for small groups and individuals
2. Review Connector’s list of “to-do” tasks
3. Clarify roles & understanding in support of work delivery
4. Identify “rules of engagement” to continue increasing board effectiveness

Agenda
8:00 – 8:30 Breakfast
8:15 – 8:30 Session Objectives Jon/Spencer
Expectations
Quick Review of “Deliverables”
8:30 – 9:30 Health Care Overview Phil Vogel
How the Connecticut Business & Industry Assn. administers a broad choice
of plans to small groups,
9:30 – 10:15 Health Care Overview Bela Gorman
Risk selection & pricing dynamics for group versus individual buyers
10:15 – 10:30 Break
10:30 – 12:00 Connector Deliverables Jon
Review in More Detail Our “Deliverables”
12:00 – 1:00 Working Lunch Jon/Spencer
Differentiating Board/Staff Work
1:00 – 2:00 “Rules of Engagement” Spencer
Time Management for Board & Staff
Communications
Options for Approaching Tough Issues
Other
2:00 – 2:30 Wrap Up Jon/Spencer
Summary of Learnings
Outstanding Concerns
Closing Comments
Adjourn Retreat

The Special Commission studying the merger of the non-group and small group insurance markets will not meet this week. The next meeting is scheduled for next Thursday, November 2 from 10 am to noon at the offices of the Division of Insurance. We hope to have a copy of the agenda to post prior to the meeting.

More MEGA Life concerns were raised by a lawsuit filed by the Attorney General’s office yesterday. Here is today’s Boston Globe article by Chris Rowland about MEGA Life’s alleged illegal practices, including failure to offer mandated benefits, unfair denials of coverage, and failure to explain coverage limits and exclusions.

As noted yesterday, Insurance Commissioner Julie Bowler has publicly supported allowing MEGA Life to expand its plan offerings in Massachusetts through the Connector. The AG suit shows why this is a bad idea. Though Bowler says the Division of Insurance will monitor company practices, what she means by “oversight” is far from clear. Without a clear monitoring plan, allowing its plans to be offered through the Connector will do more harm than good to consumers.

Low benefit/high cost-sharing plans put consumers at risk - especially economically vulnerable consumers. Expanded choice is great in theory, only if choice is backed by clear and accurate information. Choices that leave consumers exposed to financial ruin should not be part of the equation. Expecting consumers to do a comprehensive comparison of benefits and costs of Connector plans is unrealistic. The purpose of the Connector is to aid this process. The Connector needs to ensure full transparency of plans offered through it, especially any plans that include limited benefits or high cost sharing. If being required to purchase insurance is scary, think about being required to buy something and then discovering it won’t cover you when you get sick.

What do you think? How much choice is too much? What can the Connector do to protect consumers and make the choices meaningfully distinct?
Lisa Kaplan Howe

Nice piece in last Friday’s North Adams Transcript on health reform implementation in Northern Berkshire County. Nice photo of Chip Joffe Halpern, Executive Director of Ecu-Care, board president at Health Care For All, and a member of the board of the Connector. Here’s one graph:

“During the last two weeks, we have enrolled 30 new clients in the Commonwealth Care program and only nine people in our volunteer doctor program,” Joffe-Halpern said. “Before, we would have enrolled all 39 in our volunteer doctor program. And after Jan. 1, those nine will be transferred over to Commonwealth Care. We will no longer need to rely on the generous care of our volunteer doctors.”

Regular readers of Healthy Blog know you’re a quiet bunch. Our stats tell us we have between 400-600 unique visitors a day — insiders, outsiders, and betweeners. A good sized readership, yet comments are infrequent. We would like to change that — in the interest of triggering a more robust conversation about the progress of health reform and more.

Regular readers also know there’s a lot to Chapter 58. Often, there are so many things going on, we struggle just to keep up with reporting them. We know the regular media pays sporadic attention, as best they can, within time and space limitations. It’s worrisome there’s so much going on, we miss important details and nuances.

Two cases in point — both from recent postings:

October 20th: …the Connector expects to solicit three options from each insurer consisting of low/medium/high options with premiums covering 60-65%, 70-75%, and 90-95% of a typical person’s medical costs. Kingsdale would not be tied to any specific numbers for coverage levels. He said they will defer to the board whether there will be guidance for the plans about deductibles or coinsurance…

So what do we think about plans the cover only 60% of a “typical person’s medical costs”? Leaves a lot of potential bills to be paid by someone in a marginal economic circumstance. Anybody have the chance to read the stunning article in Sunday’s New York Times about the family with a young daughter with about a dozen severe mental illnesses? What does being a “prudent consumer” have to do with them? We need public discussion of these issues and we need it soon.

And a second item:

October 12th: …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.

From our perspective, the departure of Mega Life and Golden Rule from the Massachusetts insurance market was a cause for celebration. They only functioned in Massachusetts to the extent they could do what’s called “medical underwriting” or rating persons according to health risk. So stay healthy and pay lower premiums — have a cancer episode and watch your premiums go up 500%. Health insurance for when you don’t need it. Good riddance.

What do you think? Are we off base? Are these good ideas put forward by Kingsdale and Bowler? Let’s get some conversation going, please.

Monday evening, the Mass. Health Council will honor Steve Rosenfeld with their annual award. Permit us to take a moment to offer our own congrats to Steve who has made a remarkable contribution to improving health care in Massachusetts. He has been particularly important to the family of organizations that thrive at 30 Winter Street, including HCFA.

Steve is the founder and first president of Health Law Advocates, HCFA’s non-profit law firm, and has been an indispensible leader for HLA since its founding in 1995. Steve was a founding force — and current director — behind the creation of the Commonwealth Care Alliance, a cutting edge medical management company for dual eligibles (folks enrolled in both Medicare and Medicaid). Steve has been a longtime board member of HCFA and an always-there friend and supporter. Steve is also a board member at Community Catalyst and helped to launch CC’s Prescription Access Litigation Project which recently was responsible for a $4 billion pharmaceutical settlement.

Steve has been a vital force in more organizations we can count, and is always there with advice, support, and essential counsel. He served as chief legal counsel and chief of staff for Gov. Michael Dukakis between 1983 and 1990. He’s seen the highs and lows of just about everything.

He’s a fantastic friend. We offer sincere congratulations for this well deserved honor.

New report released this past Monday by the MA Oral Health Collaborative and the Catalyst Institute: Massachusetts Oral Health Report — Mapping Access to Oral Health Care in Massachusetts. Click here for the full report.

Here are the major findings:

– Many rural areas of Massachusetts lack easy access to dental care providers.
– 30% of cities/towns in MA don’t have enough dentists to care for the people who live there.
— 69 cities/towns have no dentist.
– 58% of cities/towns have no dental specialists.
– 65% of cities/towns have no pediatric dentists.
– More than 50% of cities/towns have no dentist who accepts MassHealth.
– The majority of MassHealth dentists are clustered in urban areas.

Transcript from last night’s debate, courtesy of Boston.com’s blog:

Allison King (NECN): Ms. Ross under the new state health care law, starting in July thousands of families with no health insurance will be in for a shock when they realize they’re going to have to purchase health care on their own at a cost of nearly $3,000 a year. As governor would you be prepared to enforce this law even if families can’t afford it?

Grace Ross: I actually think we need to completely re-frame the law that was passed. People have talked about as a universal coverage and they’ve talked about it as a plan and it is neither. Not only will those families be shocked about it, so will our small business owners who haven’t been able to afford health care for their workers at all when they find out that if they couldn’t afford it for their family they’re going to be paying to a tune of $3,000 for them, their partner, whatever. … we’ll have to enforce what’s been passed until we change it but we need to change it immediately. If I’m in on Jan. 3 my plan is first week we’re going to sit down and talk about what real universal health care is — it contains costs, it covers everybody, and we can afford it for what we’re already paying. We spend 39 percent of our health care dollars on non-medical related things and we have to change the system to one that’s a real system and works for everybody and contains costs for everybody.

Allison King: Now I know you support a single-payer system. In some countries that use single payer, Canada to name one, there has been more access but quality of care has gone down. Why would you want to emulate a system like that?

Grace Ross: Quality of care for whom? Because Massachusetts there are more than 500,000 of us who are not getting care at all unless we go into an emergency room after we’re very sick. That’s incredibly expensive. So there is a quality of care for those who can afford it, and there’s another level for care for those who can not afford it. And we have spiraling rates of encephalitis going on that have people very concerned. We have meningitis in 14 cases in Framingham this summer. That’s unconscionable. So quality of care if you can’t get to it doesn’t matter.

Kerry Healey: If I could please. Just on this very stage just a few months ago the Democratic leadership of this state including Ted Kennedy and the governor came together to sign historic health care reforms. Those reforms for the first time are going to be able to extend coverage to that half million people here in Massachusetts who need coverage and for the poorest of the poor that coverage will cost nothing. For those who are between 100 percent and 300 percent of the poverty level we we’ll make sure there is a sliding scale in place so that they can afford health care and this will - this will bring down the cost of health care for everyone because they will be receiving high quality care, preventative care.

Deval Patrick: And right after that glorious ceremony when the bunting came down and the bands went home, this administration vetoed the funding mechanism for it. A cynical move. And your campaign, lieutenant governor, campaigns on the promise of killing that employer assessment once and for all. We made a very good judgement it seems to me choosing between what we thought used to be the only choices available to us — between a perfect system and no solution at all. We took a step forward. If I have the chance I’m going to implement it from the perspective that health is a public good and get at the high costs.

Christy Mihos: Later on this month the health care connector board is meeting up in Shrewsbury behind closed doors to promulgate the regulations and work forward on this. They got together and last week they found out that this law doesn’t cover 80,000 children here in the Commonwealth. Open up the process. Lets see what’s going on behind closed doors. The Democrats and Republicans aren’t telling you the real cost of this issue and that is going to be, that’s going to come down hard on every single one of us when they’ve mandated that we have to pay for health care and they’re not giving us the right number. Open up the process, let us see who’s getting greased here.

Comments:

1. Allison King’s question assumes the penalties from the Individual Mandate will fall on everyone without health insurance. This is not correct. The law states the penalties fall on those without coverage for whom the purchase of coverage is “affordable” — definition to be determined next year by the Board of the Connector. So her example of a family being forced to purchase unaffordable coverage is not accurate.

2. Deval’s comment that the Romney vetoes undermined the legislative consensus Healey praised is dead-on accurate.

3. Poor Christy is deeply confused. Nobody just “discovered” that 80,000 children won’t be covered — there’s affordable coverage available for every one of them. And, as our faithful blog readers know, the process has been pretty darn open, thanks to our faithful correspondents.

The Market Merger Commission met Thursday with Jon Kingsdale and Bob Carey of the Connector to discuss decisions the Connector may make affecting the Commission’s study. There were more folks in attendance this week, 15 spectators, and anticipation at what might be revealed. The most active Merger Commission members were there, including Amy Lischko (Commissioner of the Division of Health Care Finance and Policy), who made valuable contributions, particularly when clarification was needed on Chapter 58.

The meeting was fascinating, for what Kingsdale and Carey revealed about the Connector’s plans, and because some of the smartest local minds in the insurance business offered opinions, usually with consensus, on how to interpret the most complicated provisions of Chapter 58. Kingsdale was careful to note - with two of his board members in attendance, Celia Wcislo and Jon Gruber - that his answers were preliminary and subject to Board approval.

Number of Options:
The Commission first wanted to know how many plan options would be available through the Connector. Bob said they wanted to give consumers choice, but not too much (to avoid a Medicare Part D problem). He said the Connector expects to solicit three options from each insurer consisting of low/medium/high options with premiums covering 60-65%, 70-75%, and 90-95% of a typical person’s medical costs. Kingsdale would not be tied to any specific numbers for coverage levels. He said they will defer to the board whether there will be guidance for the plans about deductibles or coinsurance. Carriers will be able to sell plans inside and outside of the Connector.

Young Adult Plans:
The three options do not include young adult plans, which Bob expects will offer less coverage than the low option. To offer a young adult plan, a carrier will have to offer the three options as well, to prevent carriers from selling only to this desirable population. Young adult plans will be available only through the Connector. Young adult plans will be part of the same risk pool as other plans, so the difference in prices will reflect differences in benefits.

Timeline:
Kingsdale expects the Board to make most decisions about this by the end of November, so they can stick to this timeline:

November: Connector decides on plan guidelines
January: Carriers submit proposed plans
March: Connector approves plans
May: Enrollment begins.

There was no discussion of political considerations. Kingsdale noted that the timeline may be thrown off if there are more issues or if issues become contentious. He said the Board may hold extra meetings to stay on schedule.

Marketing:
Carriers will market their plans, and the Connector will co-brand them. Kingsdale expects the Connector to engage in outreach and marketing, expects the Connector to spend “in the seven figure range” on outreach, and expects marketing to kick into high gear in March or April when they know what plan options will be.

Rate Variations:
Asked if rates would differ within and outside the Connector, Kingsdale responded: “They can’t be set differently, but they won’t be the same.” He explained that in order to give people plan choice, rates must be calculated on an individual basis; that means rates will vary depending on whether the employer purchases through the Connector (which would apply individual rates to employees) or purchases through the private market (which would apply a group rate to all employees). Kingsdale thought this was one reason employers will not be large Connector users. If employers purchase insurance through the Connector, some employees will pay higher rates than others. This will lead employees to complain, which employers won’t like. To avoid this, they won’t use the Connector. Kingsdale thinks the main Connector users will be nongroup market members. Bob added that current non-group enrollees are expected to choose to stay with their current providers, and new enrollees will be the main users. Consultant Bela Gorman noted each carrier must pool all the business they sell under one combined license for rating purposes; so while prices may vary, each carrier’s risk will combine their business in and outside the Connector.

Consistency within Employers
Employers cannot offer insurance purchased both through Connector and through a private carrier. Also, employers must offer the same options to all employees. Connector staff will recommend that if an employer offers insurance and covers enough of the premium, employees cannot opt out and purchase their own insurance through the Connector. Employees can, however, opt to purchase insurance through the private merged market (as they do now with non-group). The exception to these rules is that part-time employees can be treated differently than full-timers.

Regarding part-timers, Bob said the “sub-connectors” will help them aggregate premium contributions from multiple employers. Kingsdale said the Board will have to decide what to do if one employer fails to contribute. He thinks in that situation they will have to cut off the employee’s coverage.

Section 125 Plans:
Bob explained that while no employers are required to contribute to health insurance plans, employers with more than 10 employees must set up “section 125” cafeteria plans or face a penalty. He noted that since the federal government controls the guidelines for 125 plans, the Connector will just tell employers to follow the federal guidelines. (The board has the discretion to establish other criteria, but that could run into ERISA problems.) He said sub-connectors will find ways to make it easier for employers to set up 125 plans. He noted that independent contractors are not eligible to participate in 125 plans. Amy Lischko noted that independent contractors are self employed and can already deduct insurance costs from their taxes.

Open enrollment periods and lock in:
Kingsdale said the Connector staff hasn’t given thought to open enrollment periods, though would like people to enroll for a full year. Letting people switch plans too often leads to higher premiums. They are more concerned about people switching up and down between plan levels than switching in and out of coverage. Kingsdale said the Connector is looking for input on dealing with open enrollment. Commission members raised a concern whether coupling a limited open enrollment period with the individual mandate would create a trap for individuals. They offered several solutions: allow enrollment throughout the year with higher prices outside of the open enrollment period, or allow in and out changes but not up and down changes.

Other Issues:
Bob said the Connector’s seal of approval is necessary before a plan can be sold through the Connector, but not before it may be sold directly from carriers. The seal of approval is distinct from licensing. If an employer does not contribute to its employees’ insurance, the employer will have no say in the choice of insurance plans. The two to one rate band applies to products outside the Connector, as well as those offered through the Connector.
Eric Benson with Melissa Shannon

Yesterday the House and Senate sent to the Governor their health reform “Technical Corrections” legislation. The bill, 82 sections and 33 pages, mainly changes effective dates and references. It also clarifies the staggered terms for Connector and Quality and Cost Council Board members.

Several sections respond to a technical federal concern in the MassHealth waiver; without it the state would not be able to provide appropriated assistance to the safety net hospitals.

One provision explicitly directs the Connector Board to consider deductibles when determining affordability, and another eliminates a requirement that Pool applicants report their social security number.

We don’t see anything controversial here at first glance and hope the Governor will sign the bill quickly.

Massachusetts released its report on private employer workers on public coverage last February. The cost in Massachusetts was over $240 million. Now Illinois has done the same study for their state. Just like Massachusetts, #1 and #2 — Walmart and McDonalds. Here are some excerpts:

By Judith Graham and Barbara Rose, October 7, 2006

Hundreds of thousands of low-wage workers in Illinois are enrolled in public health programs, adding hundreds of millions of dollars in medical costs to the state budget, according to a new report. … 363,506 workers from 3,270 companies obtained medical benefits from Medicaid, KidCare and FamilyCare between August 2005 and March. The cost of medical services received during that period: $335.7 million.

The study also looked at uninsured workers who get charity care at Illinois hospitals or who fail to pay all or some of their bills. Hospitals’ charity bills for these workers came to $77 million during a recent eight-month period. Companies whose workers most often request subsidized care are a who’s who of the service industry, including Wal-Mart, McDonald’s, Burger King, Target, Jewel, Manpower and Kelly Services, according to the report. Also at the top of the list is the State of Illinois, which doesn’t offer insurance to workers who provide in-home care for the elderly.

“This goes far beyond Wal-Mart or any other service industry provider. It’s a much broader problem,” said state Sen. Jeffrey Schoenberg (D-Evanston), who sponsored legislation last year mandating the new report. “The myth is that public health insurance has expanded because of individuals and families who have no employment. The reality is that enrollment is increasing because employers in retail and hospitality and other service sectors are failing to provide health insurance coverage to their employees.”

Businesses contend they do the best they can to provide benefits while trying to stay competitive. “A lot of these folks are part-time workers and aren’t eligible for benefit packages. It is not the responsibility of the employer community to solve all of the financial issues in people’s lives,” said David Vite, president and chief executive of the Illinois Retail Merchants Association. …

Based on the incomplete data, the cost of hospital charity care to 1,132 patients who identified themselves as Wal-Mart employees during a recent 12-month period totaled nearly $2.5 million, more than any other Illinois employer. Total costs can’t be extrapolated from this partial data, experts warned. Wal-Mart employs more than 45,000 people in Illinois.

Company spokesman Dan Fogleman said the retailer is improving benefits, most recently by cutting the waiting time for eligibility for insurance to one year from two years and adding a health insurance plan that costs as little as $11 per month. “We are doing our part as an employer to provide affordable, accessible and secure health insurance,” he said.

McDonald’s ranked No. 2 after Wal-Mart, with medical costs totaling $2.4 million for 1,248 uninsured who said they worked for the fast-food chain. The Oak Brook-based employer and its franchisees employ more than 10,000 in Illinois, the majority employed by franchisees who set their own wage and benefit standards. “McDonald’s workforce is diverse and cannot be defined as a simple one size fits all,” the company said in an e-mailed statement. “It includes students, moms, dads and seniors who represent full-time and part-time employees and salaried managers in our restaurants.” Workers at company-owned restaurants have access to health care, the statement said, but coverage for many young adult workers falls under their parents’ medical programs.