SHARED RESPONSIBILITY by Nancy Turnbull

The board of the Connector, on which I serve, is facing some difficult decisions about enrollee premiums and cost-sharing for the Commonwealth Care (CommCare) program. State finances are tight, CommCare enrollment is larger than expected, and health care costs and premiums continue to rise much faster than overall inflation or wages. All of these factors are combining to put financial pressure on the CommCare program.

Let’s be clear about the problem: The financial challenges facing CommCare result from covering more people than projected at this point in the program’s development. Spending per person is on target. Of course, this doesn’t lessen the need to deal with the finances of the program. But it does suggest that the problem results from something good: getting more people insured.

As one approach to moderating rising program costs, the Connector board is considering asking Commonwealth Care members to pay more, in the form of larger copayments for those above the poverty level and bigger premium contributions for program enrollees who have incomes above 150% FPL. We don’t yet know how much these proposed changes would save for the state or how much they would cost enrollees, and the Connector board, and the public, need that information before any vote on any proposed changes.

Some increase in cost-sharing for Commonwealth Care enrollees might be necessary. But as we seek to deal with the financial challenges of the program, we need to make sure that we distribute the burden fairly. Here are a few thoughts on this equation:

The long-term solution to dealing with the challenges of the CommCare program (and other coverage aspects of Chapter 58) must be to find enduring approaches to moderating the growth of health care premiums and costs. The cost conversation is getting louder and stronger in Massachusetts. This is a welcome result of the “Coverage First” approach that is embedded in Chapter 58—first cover people, and then we will have better preconditions for talking seriously about costs. It’s hard to galvanize public and political resolve to really tackle the challenges of controlling costs without a clear benefit. Now we have one: sustaining and extending the coverage gains of Chapter 58.

While the cost conversation is beginning in earnest, it’s unlikely to produce any dramatic results in the short-term. So that leaves us with only three blunt instruments to deal with CommCare spending: cost-shifting, and increasing revenues, and tough negotiation/moral suasion.

Cost-shifting, in the form of larger copayments and premium contributions will create financial and access burdens for CommCare members, all of whom have low to moderate incomes. Lori Berry of the Lynn Community Health Center and Reverend Hurmon Hamilton of GBIO have recently written eloquently about these issues on this blog. Among the points they made is that if higher cost-sharing discourages CommCare members from getting necessary care, this approach is penny wise and pound foolish.

The Patrick administration has already proposed giving the CommCare program significant additional state funding. In the Governor’s budget, proposed spending for the Commonwealth Care program increases by $250 million in FY09 compared to projected spending for FY08. (The state and federal governments would share this additional cost.)

But other resources, including new resources, may be needed in the short-term if we want to avoid shifting significant costs onto CommCare members. According to press reports, the Senate President and Speaker may be willing to consider a cigarette tax increase to help fund health reform. But we should also talk about what other resources could be tapped through tough negotiation in the short-term to help deal with rising CommCare spending, while we work to make significant and sustainable progress on the cost control front.

For example, many folks, on this blog and elsewhere, have noted that providers and insurers are among the major “winners” in Chapter 58. The benefits for providers included significant Medicaid rate increases (designed to reduce cost-shifting to the private payers), changes to the methodology used to pay for free care under the Health Safety Net Trust Fund (aka the Uncompensated Care Pool), and the preservation of significant special payments that go to certain providers. For insurers, there have been hundreds of thousands of new members, both in the public CommCare and MassHealth programs, and also in the private market because of the individual mandate. These membership gains come during a period of robust overall profitability for many providers and health plans. For example, in 2006, the health plans based in Massachusetts had profits of more than $400 million and their combined net worth/reserves as of year-end 2006 exceeded $2.6 billion. We’ll soon see the financial results for 2007, when the health plans file their year-end financial reports with the Division of Insurance at the end of the month. Of course, the financial performance and position of individual organizations varies widely. There are striking disparities in performance across the hospitals and insurers—some doing very well and others are not. So any proposal to examine the other resources that might be available to help fund health reform in the short-term must be calibrated carefully to the circumstances of individual entities.

Some employers could also be asked to do more: for example, the fair share assessment, imposed on companies that do not insure their workers, has generated only $5 million, far, far less than was anticipated. Another idea was raised at the Connector’s last meeting by board member Celia Wcislo, who noted that the payer and provider assessments that help fund the uncompensated care pool/Health Safety Net Trust Fund haven’t risen for many years.

All of these potential sources of additional revenue deserve serious consideration. If we are going to even think about asking CommCare members, who are among the poorest and most vulnerable among us, to pay any more of the costs of health reform, we must also ask more from the many others who are benefiting from health reform.

After all, isn’t that what shared responsibility is all about?

Nancy Turnbull
Harvard School of Public Health

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  • Norma

    In response to Charles Miller,
    Americans are fed up,I found a quote from Barbara Ehrenreich.com blog
    “Bow your and raise the white flags.After facing down the Third Reich,the Japanese Empire,the U.S.S.R.Manuel Noriega and Saddam Hussein,the United States has met an enemy it dares not confront-The American private health insurance industry!”And Barbara is right on.

  • CHARLES MILLER

    I’m a self employed carpenter. All small bussiness group polices make me pay my deductable by the “calender year” that runs January 1 to December 31. If I need medical care in September then again in Januray (witch actually did happen) I have to pay $500. twice in 5 months. Now if I change polices I’ll have to pay the deductable again. That seems sneaky to say the least.
    I’ve “discussed” this with Harved Pilgram and hit a wall. Does anyone else think this unfare? Why isn’t a year a year?

  • Betsy

    Well, I’d certainly love to see some financial benefit from CommonwealthCare. I’m a primary care provider. I am spending more than half of all of my reimbursements on office overhead to process all the paper and manage all the phone calls for pre-authorization, prior approval, and other cost-cutting measures institued by insurance companies. I spend 50% of my time on uncompensated paperwork. And now the insurance companies are telling me they are going to “tier” me based on whether my patients comply with my recommendations! And I haven’t seen $1 in added revenue from this program, and don’t expect to. Insurance companies and hospitals may be seeing some financial rewards from CommonwealthCare but it isn’t reaching most primary care providers.

  • Norma

    Never doubt that a small group of thoughtful,committed,citizens can change the world;indeed it’s the only thing that ever has.A quote by Margaret Mead.I find it fitting when we the people want to end the greedy strangle hold from the insurance industry.

  • Get Real

    What have we here? Another of Mr. Cleve Killingsworth’s Ladies in Waiting sent with her carefully crafted and packaged PR to persuade the public that soaking the taxpayers, as has been done with this fake reform law, makes “Massachusetts better off for it than not”. Well the public begs to differ.

    Mrs RyanVollmar, a BCBS spokeswoman (highly paid we can rest assured by her boss Mr Killingsworth, CEO of MA BCBS) would have us believe that the Chap 58 boondoggle for the private insurers is the only way to expand coverage. Public funds spent on the purchase of private insurance…this absurdly wasteful financing mechanism is indeed a cruel hoax for BCBS and their industry cohorts to thrust upon us and upon our elected officials as we struggle to balance the budget while facing a >$1.2Bil budget deficit.

    As it was unclear to the BCBS spokesperson where Get Real’s numbers are from, the sources are as follows: United States Census Bureau data on number of uninsured in Massachusetts tallied at 748,000 as recently reported in the Boston Globe on Feb, 3, 2009, page A15.

    Numerous reports in the Globe and elsewhere tout the number of newly insured in MA since the punitive mandate law began as being “over 300,000″.

    748k less 300k = 448,000

    So, after spending hundreds of millions in new state dollars under this fake reform 448,000 MA state residents remain uninsured (MA had the distinction of already spending 30% MORE than ANY OTHER state in the entire country on health care before this Chapter boondoggle began).

    MIT economist Jon Gruber has estimated in a very public fashion that 20% of the uninsured would be generously granted official state permission to remain uninsured, so out of 748k that leaves 142,000 who will likely remain uninsured but who will not be punished with fines under the individual mandate.

    448k less 142k = 306,000

    Is it clear now? 306,000 is the “hundreds of thousands of Bay State residents who will soon be” fined for not having purchased health insurance”.

    BCBS spokesperson, do post another comment if you or your colleagues at Blue Cross Blue Shield or at the MA Association of Health Plans are still “unclear where Get Real is getting his/her numbers”.

  • Huddled Masses

    Dear Ms Turnbull,

    Can you please tell us why the minutes from the Connector board meeting of Feb. 14, 2008 have not yet been published on the web?

    Also, can you please explain why many previously web published (HTML) Connector documents are no longer available and take the viewer directly to the Connector “sign me up” page?

  • Susan Ryan-Vollmar

    Get Real characterizes the Massachusetts health reform law as “an extremely cruel hoax for the hundreds of thousands of Bay State residents who will soon be” fined for not having purchased health insurance.

    It’s unclear where Get Real is getting his/her numbers. With respect to the implementation of Chapter 58, the figure “hundreds of thousands” would best describe the number of previously uninsured Bay State residents who can now access routine health care.

    There are many valid criticisms to make of Chapter 58. However, what cannot be denied is that Massachusetts is better off for it than not because the law has dramatically expanded access to health care for every Massachusetts resident. Think of where we’d be without the implementation of Chapter 58: We would not be arguing about the fairness or not of the individual mandate. Lawmakers and policy analysts would be scrambling to fill the gaping hole left by the loss of hundreds of millions of federal Medicaid dollars.

    Susan Ryan-Vollmar
    Director of Communications, Blue Cross Blue Shield of Massachusetts Foundation

  • Get Real

    No matter how hard the Ladies and Lords in waiting keep trying to dress it up, this RomneyCare health “reform” Emperor still has no clothes. And the huddled masses continue to pay and pay and pay with no end in sight…

    What a cruel and unusual experiment this law has turned out to be. A hoax perpetrated on the taxpayers who pay through the nose to fund the wasteful, fragmented, and red-tape laden private insurance sector. An extremely cruel hoax for the hundreds of thousands of Bay State residents who will soon be punished through their state tax returns – with fines of up to $912.00 a year – just for being uninsured because they cannot afford to purchase expensive private insurance that is now required by the so-called “reform” law.

    Mrs Turnbulls entry lays it out so clearly:

    “For insurers, there have been hundreds of thousands of new members…also in the private market because of the individual mandate.
    These membership gains come during a period of robust overall profitability for many providers and health plans.
    For example, in 2006, the health plans based in Massachusetts had profits of more than $400 million and their combined net worth/reserves as of year-end 2006 exceeded $2.6 billion.”

    A reminder to readers that this “robust overall profitability” is reaped at our expense in more ways than one. These high profits are, in part, made possible through the insurance companies, HMOs and hospital chains enjoying legal status as not-for-profit “charitable institutions”. Seriously. They are heavily taxpayer subsidized due to being not-for-profit corporations (with the rare exception in the MA health care industry).

    The legal obligations of these corporations are overseen, or not, primarily by Secretary of State William Galvin, Attorney General Martha Coakley (how’s the AG investigation of BCBS CEO Van Faasen’s payout of $19.4Mil coming along?), and our Together We Can Governor Deval Patrick.

    Who oversees the legal and moral obligations to us state taxpayers and to the uninsured who need health care but instead will be getting punished with steep fines?

    Is the public backlash beginning now? Telephone Governor Patrick’s office to leave your message at 617-725-4005.