Commonwealth Care Average Premium to Decline &
New Affordability Schedule Not to Increase
In mid March, John Kingsdale, Executive Director of the Commonwealth Connector announced that average health insurance premiums for the 165,000 Commonwealth Care members will decline in the new fiscal year starting July 2009. As a result of a slightly negative cost trend, both the cost to government for each Commonwealth Care enrollee and the enrollee's average monthly premium contribution will decrease. Instead of the budgeted increase of 2% in government expenditures per member, there will be a slight reduction. Moreover, the average monthly contribution by enrollees toward premiums will decline about $2.44, or nearly 5%. (It's important to stress that this refers to average premium contributions - this does not mean that all members will see a decrease in their monthly premiums).
This decline reflects two factors. First, the Board of the Connector decided in light of the declining Commonwealth Care premium trend for FY 2010 and the extraordinary economic circumstances, to freeze the base enrollee contributions for each income bracket. Second, the Connector's procurement process for FY 2010 succeeded in reducing both overall premium trend and the variation in prices among higher-priced options. Therefore, even those Commonwealth Care enrollees who prefer a higher-priced health plan will pay less on average, over and above their base contribution. In these extraordinary economic times, this achievement will help sustain the Commonwealth's landmark health reform efforts.
Part of the savings is attributable to Commonwealth Care’s new procurement process. They introduced a simplified bidding process that offered incentives for competitive bidding and also invited new health plans to participate. The result is that the Board approved all four existing plans, at lower rates, plus an entirely new health plan for Massachusetts-one of very few new entrants to Massachusetts' health insurance market in decades. The new health plan, Commonwealth Family Health Plan, will be the lowest priced plan in Commonwealth Care throughout its service area. It also adds nearly 100 new primary care physicians who were previously unavailable to Commonwealth Care members.
Finally, following the decision on enrollee premium contributions, the Board voted to update the Affordability Schedule for calendar year 2009. This is a progressive schedule of premiums that are considered "affordable" at various income levels and therefore determine whether tax-payers are responsible for having insurance. At the lower end of the income scale (up to 300% of the federal poverty level), the schedule will not increase at all for 2009; above 300% of FPL, "affordable" premiums will increase only 3.5%. A revised schedule and accompanying set of tables will be posted on the Connector's web site in the near future.
-Adapted from: “Executive Director's Monthly Message” e-mail, Jon Kingsdale, March 12, 2009.
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