HEALTH CARE REFORM BILL

PROCESS:

The Massachusetts legislative Conference Committee released their health care reform bill in early April, after months of debate, and it was approved by the full House and Senate. The Governor passed the bill with some line-item vetoes including the employer “Fair Share Assessment” fee, restoration of benefits for elderly and disabled legal immigrants and MassHealth dental restoration. These three vetoes were overridden at the end of April by the House. The Senate is to consider them in early May.

The Affordable Care Today (ACT!) Coalition, the broad-based coalition led by Greater Boston Interfaith Organization and Health Care for All, voted to endorse the bill. Particulars of the bill follow; some details may change.

COMPONENTS:

Generally, the health reform bill attempts to cover 90%-95% of the uninsured in the state over the next 3 years, primarily via the following components:

I. MassHealth:

A. Expands Masshealth to 300% FPL, effective 7/1/06:

Children currently on Children’s Medical Security Plan (CMSP) under 300% who meet citizenship requirements will be able to move over to MassHealth, which has more comprehensive benefits. This will require an amendment to the Commonwealth’s State Health Insurance Program (SCHIP) plan, which needs federal approval but can probably be a separate process from the general MassHealth waiver approval process.

B. Lifts MassHealth Enrollment Caps:

Expands MassHealth Essential by increasing enrollment cap to 60,000 individuals, effective 7/1/06. This should clear everyone off the waiting list for this program. Lifts the existing enrollment caps for CommonHealth and the HIV program, effective 7/1/06. These require federal approval as well as appropriations in the state budget. Federal approval could get caught up in the general Federal waiver approval process.

C. Restores optional services for adults on MassHealth:

Restores dental coverage, eyeglasses, and other services for adults back to where they were as of 1/1/02, effective 7/1/06. This includes individuals on MassHealth Essential.

Restoration of optional benefits to traditional Medicaid populations shouldn’t require federal approval under the waiver, but just a state plan amendment.

D. Wellness benefits for adults on MassHealth:

For adults who participate in smoking cessation, diabetes and cancer screening, stroke education, teen pregnancy prevention, and other preventive programs, there will be cuts in premiums and co-pays, effective 7/1/06.

E. Other:

Prohibits the state from tightening the disability standard further than the federal standard. Restores MassHealth Essential for senior and disabled legal immigrants and prohibits sponsor deeming, effective 7/1/06. This means that although all the adult legal immigrants were not restored, this piece of the legal immigrant population is restored and can’t be asked to complete any information on their immigration sponsors.

II. Free Care Pool:

There can be no changes to the Free Care Pool regulations until 10/1/07. Funding will remain the same. On 10/1/07, the Pool becomes the “Health Safety Net Trust Fund” which will be administered by Office of Medicaid. As of 10/1/07, payments will be made on a claims basis.

III. Commonwealth Care:

Subsidized coverage for those under 300% FPL. For those under 100% FPL, there will be no premiums. For those between 100% - 300% FPL, premiums will be assigned on a sliding scale (not specified in the bill). No deductibles for anyone, regardless of income level. For those under 100% FPL, coverage is much like MassHealth and is detailed in the bill (inpatient, outpatient, prescription coverage, mental health and substance abuse services, and dental). For those above 100% FPL, benefits are not specified in the bill. No enrollment caps for Commonwealth Care plans. Although MassHealth coverage was not restored for legal immigrant adults (except for senior and disabled), there is nothing prohibiting them from qualifying for Commonwealth Care plans. Until 2009, Commonwealth Care plans will be administered by the 4 Medicaid Managed Care Organizations (Health Net, Network Health, Fallon, and Neighborhood Health Plan). After 2009, if plans haven’t met enrollment goals, other insurance companies may be able to offer Commonwealth Care.

IV. Additional Components:

Insurance Connector:

The bill establishes a “Commonwealth Health Insurance Connector”: an independent authority to connect individuals and small businesses with health insurance products. $3 million included for outreach and enrollment grants (for organizations to provide outreach to uninsured who might be eligible for all of these expanded programs). The bill establishes a disparities committee.

Mental Health:

The state contract with MassHealth Behavioral Partnership ends in July 2006; however, this bill prohibits changes to the MassHealth behavioral health carve out until a study can be completed. The DMH Commissioner must approve the operations of any MassHealth behavioral health carve out provider.

Individual Mandate:

There is an individual requirement to purchase coverage if it is deemed affordable. The definition of “affordable” is not detailed in the bill, but is left up to the Connector Board to define.

In 2007, the penalty for not having health insurance is loss of personal exemption on state income tax in 2007. In 2008, the penalty is half the cost of a health plan.

Allows for the individual insurance market to be merged with the small group market to yield more affordable plans.

The bill requires a study before the individual mandate is implemented, and $500,000 is allocated for the study. (One particular concern is whether small group rates might increase when they are merged with the individual insurance market, which is traditionally much higher.)

Employer Assessment:

Fair Share Assessment: When an employer with 11 employees or more does not offer health insurance, that employer must pay an assessment of $295 per year per worker.

Free Rider Surcharge: When an employer has at least 5 employees use the Free Care Pool, and one worker uses at least 6 times, and cost of Free Care exceeds $50,000, then there is a surcharge imposed on the employer.

Young Adult Provisions:

Bill allows young adults to stay on their family’s health insurance plan for 2 years up to age 26. Bill allows insurers to offer special low cost health plans to young adults age 19-25.

04/06