STATE HEALTH PLAN UNDERFUNDED: NEW PATIENT CHARGES & PROPOSALS
The state's new subsidized health insurance program will cost "significantly" more than the $869 million Governor Deval Patrick proposed in his 2009 budget just two months ago, the state's top financial official said recently after insurers were granted an increase of about 10 percent.
To close the gap, the Patrick administration has asked insurers, hospitals, healthcare advocates, and business leaders to propose ways to cut costs and raise revenue. During two closed-door meetings several dozen proposals have been put forward, including raising assessments on insurers, hospitals, and businesses. The goals are to solve the short-term funding problem for next year and ensure the long-term survival of the state's near-universal health insurance initiative.
Leslie Kirwan, secretary of administration and finance, declined to discuss specifics of the proposals or the size of the budget gap, but said that without changes, the state doesn't expect "to be able to live within" the proposed budget.
On March 20, a state panel approved a contract to pay insurers about 10 percent more for each person enrolled in the subsidized insurance program, starting July 1. The insurers had asked for about a 15 percent increase, but agreed to take less after weeks of negotiations. Still, the state's cost is higher than was included in the governor's budget. Under the contract, the state also would assume more of the financial risk if the enrollees were to use more medical care than expected.
To partly offset the increased costs, the panel also voted to raise premiums by 10 percent for some of the 176,000 people enrolled in Commonwealth Care, and to increase copayments for many more. Starting July 1, the lowest premiums will range from $39 to $116 per month.
Kirwan said the gap also is because of increased enrollment, now expected to exceed projections for both the current fiscal year and the next, which will begin July 1.
Healthcare advocates vehemently had opposed increased premiums and copayments for enrollees, which were first proposed in February. They argued that the insurance would become unaffordable for many of the low-income people it was designed to serve and that it was unfair to ask enrollees to pay more without also asking more of businesses, hospitals, and insurers.
The administration muted its criticism by negotiating slightly smaller premium and copay increases, and by agreeing to seek similar but unspecified "sacrifices" from other parties.
"We're still disappointed that, at this point, the only ones making the sacrifices are enrollees and taxpayers," said the Rev. Hurmon Hamilton, president of the Greater Boston Interfaith Organization, a group of congregations that advocates for healthcare access. "But the administration is very committed to seeing all the stakeholders do their share. That's where the fight goes now."
Hamilton and other advocates pointed to private health insurers and some hospitals that they said are benefiting greatly from healthcare reform through additional members and insured patients. Some suggested that both insurers and hospitals should contribute more than the $160 million each they now pay annually to the state's free-care pool, which pays for hospital care for the uninsured. Money is being shifted from the pool to help pay for subsidies.
Advocates also said the state needs to get more money from businesses that are not providing insurance for their employees. A penalty on those businesses - of up to $295 per uninsured employee per year - has raised only about $6 million this year, far less than originally expected.
Kirwan declined to say that the state was targeting any particular sector for help. Most of the groups that helped the state pass healthcare reform two years ago are participating in the administration-led discussions about addressing the cost of Commonwealth Care. Yet, convincing them to cough up more money will not be easy.
For members of Commonwealth Care, the premiums will go up 10 percent on average. For example, people with incomes between $21,000 and $26,000 who are now paying $70 per month, will pay $77. Only those with incomes more than about $15,000 pay any premiums.
Copayments will rise $5 for a primary-care doctor's visit, to $10 for some patients and $15 for others. Copayments for drugs also will rise. For enrollees at the highest income levels covered in the program - individuals making between $26,000 and $31,000 a year - copayments for use of the emergency room and for outpatient surgery also will rise. For the first time, there will be caps on out-of-pocket expenses for all medical care, excluding medicines, of $750 or $1,500, depending on the individual's income. They placed a separate cap on medication expenses.
-Adapted from: “State health plan underfunded: Finance secretary seeks proposals on closing gap” by Alice Dembner, The Boston Globe, March 21, 2008, at http://www.boston.com/news/local/articles/2008/03/21/state_health_plan_underfunded/ and “Update on Connector meeting” from Reverend Hurmon Hamilton, President, Greater Boston Interfaith Organization, March 20, 2008.
- Generic Prescription Drugs
- On Plan Type 3 generics, they are moving the co-pay from the formerly proposed $15 to $12.50. (No movement on Plan Type 2.)
- Out-of-pocket maximum for Plan Type 3 Prescriptions
- The original proposal was no prescription drug maximum for Plan Type 3; now it is capped at $800.
- Specialist co-pays
- In Plan Type 2, this will move from a formerly proposed $20 to $18.
- In Plan Type 3, this will move from a formerly proposed $25 to $22.
3/08