It was also an important day for health care reform, because – as we celebrated two years of success – we also continued paving the path forward. The Connector’s Board finalized some of the key foundations for continuing to implement health care reform. It approved an affordability schedule to guide enforcement of the individual mandate in 2008. And it also voted to get updated Commonwealth Care and Commonwealth Choice programs up and running for July 1st of this year.

None of these were “easy” projects to accomplish. Connector staff has worked tirelessly – and the Board has engaged in thoughtful, constructive debate – on all of them. I know that the Connector Board and staff also value our continuing partnership with insurers who participate in Connector programs, as well as the counsel of advocacy, business, provider and other organizations.

It was well-recognized during yesterday’s celebration that health care reform faces many challenges moving forward – first and foremost cost and fiscal challenges. As Governor Patrick indicated yesterday, the spirit of innovation, boldness, and shared responsibility that brought us health reform is now needed to sustain health reform. A conversation to that effect has begun on this blog and elsewhere, and will continue in earnest over the coming months.

As I was thinking about how that conversation will proceed, I looked back at my CommonHealth blogs to date and saw that I actually blogged a year ago, immediately following the first birthday of health care reform. And that blog likewise began, “Yesterday was an important day for health care reform in Massachusetts.” I was referring to the fact that the Connector had just voted unanimously to approve the first state affordability schedule for implementing the individual mandate (i.e., the one that is in effect for tax year 2007).

I was amazed at the time that this actually garnered a unanimous vote. This was a hotly contested issue with divergent, strongly held views from all quarters. To be honest, I could have seen health care reform coming apart at that moment. Instead, it came together in that unanimous vote – because the many people and interests who helped launch health reform in the first place were willing to listen to one another, compromise, and take risks to keep this initiative moving forward.

I continue to be heartened by that moment – and, on its account, hopeful about our collective capacity to work through difficult cost challenges in order to sustain health care reform. One thing is for sure: I can’t wait to see what I’ll be able to write on health care reform’s third birthday!

Leslie Kirwan
Administration and Finance Secretary for Governor Deval Patrick

Following that story, there were a number of efforts to highlight information needed to understand the significance of these budget increases. I appreciate those efforts and want to reiterate some of them:

• In evaluating the costs of health reform, we should be mindful that the costs are borne not only by the state but also by the federal government.
• Anticipated Pool spending is down from pre-health care reform levels and continues to fall. It is true that this decline in Pool costs is not alone sufficient to pay for subsidized health insurance for those who previously could not afford coverage – but it does make a real and important contribution.
• Health reform is larger than Commonwealth Care. It includes expanded coverage and restored benefits through MassHealth, increased payments to providers to reduce cost-shifting, and other initiatives. We are paying more – but are also getting much in return.
• In evaluating the costs of health care reform, I find it helps to hear some of the stories of the hundreds of thousands who are newly enrolled in coverage – how it has improved their health and transformed their lives. This completes the picture of what our dollars are purchasing.

At the same time, even with caveats and context, there is no question that health care reform is expensive, and its costs are growing. The magnitude of these expenses poses an increasing challenge to those who care about our state’s capacity to sustain health care reform and our ability to invest in other priorities. Indeed, even if the better perspective is over $150 million in additional net expenses for health reform (as opposed to $400 million in gross) in fiscal year 2009, that is a substantial amount of new resources in a budget anticipating slow revenue growth. With needs for new initiatives in a range of policy areas and an uncertain economic environment, no one should be completely sanguine about this picture.

And so I consider this a pivotal year for health care reform. Health reform was enacted into law because of visionary leadership, courage and compassion on the part of the Legislature (above all), providers, insurers, business leaders, advocates and so many others. This year, I believe that same spirit can and will guide us through the challenge of sustaining health reform. The conversation has begun. Let’s get to work. The cost of inaction is too high.

Leslie Kirwan
Secretary for Administration and Finance for Governor Deval Patrick
and Connector board chairwoman

I want to thank the Connector staff for their efforts to foster a dialogue about some of the most challenging issues facing health reform. It’s clear that the Connector is often at the center of the health reform storm, confronting difficult policy decisions that don’t easily lend themselves to consensus – and all in the public eye. Given this fact, there are enormous demands on Connector staff for information and innovative policy ideas. They do a great job of meeting these demands, and we all appreciate their hard work and commitment to the success of health reform.

John McDonough, Executive Director of Health Care for All, observed the retreat and live blogged (is that a verb?) the discussion on the Healthy Blog website. Kudos to John for keeping pace with the discussion and making it accessible to those who couldn’t attend. Here is an “extreme cliff notes” version of some key issues highlighted at the retreat:

1. Health care cost containment is essential to the success and sustainability of health reform – and also critical to ensuring that state government has the capacity to invest in all of our state’s public priorities (please remember that investing in education, job creation and environmental protection, among other priorities, is critical to promoting good health).

2. Health care cost trends threaten the viability of the individual mandate. If increases in health care costs outstrip increases in income, more people will fall outside the mandate.

3. Enrollment in Commonwealth Care has been very strong – and that is a sign of success for health reform. Further enrollment trends will be closely monitored to understand the full scope of the challenge and inform policy decisions.

4. The Connector has a number of policy levers within its jurisdiction that can influence health care costs and cost trends for government, individuals and businesses – in particular, centered on the design of Commonwealth Care and Commonwealth Choice and minimum creditable coverage requirements. Commonwealth Care and Commonwealth Choice plan design will be a focus of the Connector’s attention over the coming weeks and months.

5. The Connector is not an island. There was broad interest expressed at the meeting in coordination between the Connector’s health programs (Commonwealth Care and Commonwealth Choice) and other state health programs to leverage positive change in our health care system (i.e., that could improve quality of care and restrain costs).

Leslie Kirwan
Chairwoman, Commonwealth Health Insurance Connector Authority
Administration and Finance Secretary for Governor Deval Patrick

For those who weren’t able to attend the Connector’s Board meeting, here are some of the challenges that were flagged on a draft calendar discussed at the meeting (note: these are surely not the only issues the Connector will focus on – just some of the most obvious and pressing ones).

• Commonwealth Care: the related tasks of evaluating experience under the program so far, considering program design moving forward, and negotiating new contracts with the managed care organizations which provide health insurance under this program.

• Commonwealth Choice: renewing the Seal of Approval for health plan contracts (six private health plans currently provide health insurance under this program); also, working towards allowing small businesses that contribute to health insurance to offer Commonwealth Choice plans.

• 2008 Penalties: in consultation with the Department of Revenue, reviewing the schedule of penalties in 2008 for those who can afford health insurance but fail to purchase it (as we near year two of the individual mandate, we hope to have a 2008 penalty schedule that is fair, workable and provides a meaningful incentive for those who can afford insurance to get it).

• Minimum Rx Benefit/MCC: The Connector’s minimum creditable coverage regulations (defining the minimum level of health insurance that will satisfy the individual mandate) require adults to have prescription drug coverage as of January 1, 2009. This project follows up on those regulations by elaborating on what constitutes a minimally acceptable drug benefit – specifically, examining the possibilities for constructing a minimum benefit that provides first-dollar coverage for certain drugs but also limits the overall impact on premiums (through greater cost-sharing in other areas).

• Affordability Schedule: The Connector will need to update its affordability schedule (which helps determine who can afford health insurance) for 2008, the second year of our individual mandate.

The entire draft calendar (with some proposed dates for addressing these issues) will soon be posted on the Connector’s website. The calendar is a draft, and Board members provided some very useful suggestions on other priority items for the Connector – so this is certainly subject to change and refinement over time.

I was also heartened to hear “across the Board” (literally) interest in focusing on health care cost containment. The message that cost containment is essential to the success and sustainability of health reform has echoed on this blog since its creation. The Connector has a number of levers at its disposal to promote improvements in the efficiency and quality of health care, as do other parts of state government involved in the purchase and delivery of health care (for example, MassHealth and the GIC). There is great potential for collaboration between these entities (and also with non-governmental health care players) to help “bend the cost curve” in a favorable direction. Definitely more to come on this front.

Leslie Kirwan
Secretary of Administration and Finance for Governor Deval Patrick

However, the Connector is hardly the only state player involved in implementing health reform. Our “team” includes MassHealth (expanding health coverage for children and others and leading the charge on renewing our Medicaid waiver), the Division of Insurance (implementing new health insurance rules), the Division of Health Care Finance and Policy (issuing “fair share” and “free rider” regulations and designing new eligibility rules for the Uncompensated Care Pool), and the Division of Unemployment Assistance (collecting “fair share” payments and Health Insurance Responsibility Disclosure forms from employers).

There’s also another state agency that those not familiar with Chapter 58 might least suspect to be involved with health reform, but in fact plays a critical role: our state’s Department of Revenue (DOR). DOR is vested with major responsibilities associated with implementing our new “individual mandate” requiring adults who can afford health insurance to have it. It will create and issue the tax forms through which Massachusetts residents will declare whether or not they have health insurance; work with the Connector in implementing a fair and efficient process for “hardship appeals”; and collect penalties from those who truly can afford insurance but do not have it.

DOR has already posted on its website a first draft of the tax form that Massachusetts residents will have to file early next year, declaring whether or not they had health insurance as of December 31, 2007. It will soon post a draft of the instructions that accompany this form. Commissioner Henry Dormitzer and DOR staff welcome comments and suggestions on these documents, through emails to DOR’s Forms Manager at fordp@dor.state.ma.us. Please take advantage of this opportunity to weigh in on an important part of health reform.

Leslie Kirwan
Connector board chairwoman
Secretary of Administration and Finance for Governor Deval Patrick

Leslie Kirwan
Secretary of Administration and Finance for Governor Deval Patrick
Commonwealth Connector Board chair

• The main message coming out of Monday’s Blue Cross Blue Shield Foundation event examining one year of health care reform is – cost is the next frontier of reform. Restraining costs is critical to making health care more affordable for those who currently lack health insurance; for individuals and families who are struggling to pay for the coverage they already have; for businesses who offer coverage and those we hope will do so in the future; and for government at every level, whose budgets are being stretched thin by rapidly increasing health care costs.
I am very encouraged that people are turning their attention to this issue. The Governor’s budget, the House budget, and the Senate Ways and Means budget all include initiatives to restrain Medicaid costs while also improving service delivery. The Health Care Quality and Cost Council is up and running, and we’ll soon be implementing a system requiring hospitals to meet performance benchmarks in order to receive increased reimbursements from the state. Governor Patrick’s Municipal Partnership Act would allow cities and towns to provide health insurance to municipal employees through the Group Insurance Commission, leveraging the state’s purchasing power and expertise to offer quality health care at a more affordable price. A renewed investment in public health was an important focus of health care reform and is a major theme of this year’s budget proposals, emphasizing the value of prevention in improving health and reducing long-term health care costs. There are also many ideas for using technology to reduce unnecessary paperwork and administrative costs in our health care system, and for promoting greater transparency to help consumers to make cost-effective health care choices that best suit their needs.
Health care reform became law because people from across the spectrum were deeply committed to expanding access to health insurance, open to compromise, and willing to take risks. I hope we can bring the same spirit to the closely related task of restraining health care costs. Wouldn’t it be great if we led the nation once again in tackling one of the foremost challenges in health care?
• Maintaining a strong partnership with the federal government is essential to our ongoing efforts to expand coverage to the uninsured. Our existing federal Medicaid waiver is joined at the hip with health care reform, helping us pay the cost of subsidizing health insurance for those who would have difficulty buying it on their own, and broadly setting an expectation that we will make progress in moving people (and dollars) from sporadic care in emergency rooms to preventive and comprehensive care through health insurance. Over the next fourteen months, the Executive Office of Health and Human Services will be negotiating with the federal government to renew Massachusetts’ Medicaid waiver, so we can continue working in tandem with the federal government to make the Massachusetts model the success it can and should be.

The Administration is also actively supporting efforts in Congress to provide additional funding through the State Children’s Health Insurance Program (S-CHIP) for current needs, and to reauthorize the program moving forward. This is extremely important to Massachusetts. S-CHIP was pioneered in the Commonwealth and covers 82,000 children across the state. Keep an eye on supplemental appropriations legislation being considered in Congress for some potential progress on this issue.

• May 1 was another milestone for health care reform, as the Connector launched the Commonwealth Choice program offering a range of new, more affordable health insurance products for individuals and (ultimately) small businesses. The Connector’s new website allows people to compare health insurance products in a true “apples to apples” way across the major health plans. This is helping to make the costs and benefits of health insurance products more transparent.

According to the Connector, there has already been lots of interest in Commonwealth Choice. They’ve received over 24,000 visits to the website (which generated close to 270,000 page views) and over 7,000 calls to the Commonwealth Choice call center. We can expect even more when a major marketing campaign launches later this month. The Connector is also starting to receive applications and paid enrollments (people have until 6/28 to enroll for 7/1). And the Connector is improving program administration and efficiency in several ways, including using a common enrollment form for Commonwealth Choice (before this, people would have had to fill out a different application for each health plan).

Having worked through the bidding and Seal of Approval process for these products as a Connector board member, it is exciting to see Commonwealth Choice in action. Congratulations to the hard-working staff at the Connector for getting things under way and working so hard to make this program a success.

Leslie Kirwan
Secretary of Administration and Finance for Governor Deval Patrick
Commonwealth Connector Board chair

Specifically, the Board adopted affordability standards that require virtually all adults in Massachusetts to have health insurance coverage, and took important steps to help them meet this new requirement. For example, in combination with requiring uninsured people who are eligible for subsidized health insurance through the Connector’s Commonwealth Care program to sign up, we lowered some of the program’s premiums to make them more affordable. As a result of these changes, there will soon be no premiums required for those who have incomes up to 150 percent of the federal poverty level (this was formerly the case only for those with incomes below 100 percent of the poverty level). We also voted to reduce premiums from $40 to $35 per month for those with incomes between 150 and 200 percent of the poverty level.

To complement these decisions, Governor Patrick decided to waive the premium payments for children in the State Children’s Health Insurance Program when they have parents paying premiums for Commonwealth Care coverage. This decision reflects the Governor’s deep commitment to improving access to quality, affordable health care and his continuing efforts to help health care reform achieve its immense promise. It will make health care more affordable for thousands of families, saving a family with three or more children as much as $84 per month in premiums. Secretary of Health and Human Services Judy Bigby played a critical role in advocating for this change and making it happen at this crucial time.

The affordability schedule adopted by the Connector also provides guidance to those at all income levels whose employers contribute to their insurance, as well as people who have incomes greater than three times the poverty level but don’t have employer-sponsored insurance. The schedule is ambitious, bringing into the ranks of the insured significant numbers of younger adults (among others). By purchasing health insurance, these individuals will secure better health care and financial protection in the event they get sick – the core purposes of this entire effort to expand coverage. Moreover, when they get covered, health insurance becomes more affordable for everyone else.

Our affordability schedule is also fair and humane. It recognizes that, at least initially, those at the very lowest income levels will largely not be able to afford health insurance unless they have access to significant subsidies, and that even at higher income levels, older people may have trouble paying for health insurance at current prices. It also recognizes that a schedule can only go so far in anticipating and addressing the reality of peoples’ lives and challenges. Thus, an individual waiver process will help provide protection to those facing particular circumstances that leave them facing financial hardship. We will also work to encourage employers to adopt Section 125 plans – which treat payments for health insurance as pre-tax income and, thus, can very significantly lower the actual costs of premiums for workers.

Wrestling with the issue of “affordability” and how to implement health care reform’s “individual mandate” is like walking a tightrope. On the one side, leaving too many people outside the individual mandate would leave too many people without health insurance – defeating the whole purpose of health care reform and, most importantly, hurting those very people by consigning them to sporadic care and no financial protection in the event a serious health issue came up. It would also frustrate the hope of making health care insurance more affordable for all through greater participation by younger, healthy people. On the other side, reaching too far in penalizing people for not having health insurance would ignore the fact that, for some, the cost of health insurance today does remain outside financial reach.

The approach adopted by the Board was an attempt to walk that tightrope successfully, and I am hopeful that we have succeeded. I believe this approach fulfills the core mission of health care reform to dramatically expand health insurance coverage, while at the same building in protections and flexibility throughout the process to avoid creating financial hardship for individuals who truly cannot afford health insurance. It makes targeted, appropriate investments in making health care more affordable without imposing substantial new costs on the state. It is our intent and hope that this process will be possible to administer, and with public outreach and education, capable of being understood. Of course, these are only draft proposals right now. They will be the subject of public hearings in May, and I know that the Connector Board and staff are very much looking forward to receiving input from consumers, businesses and others who will be affected by the decisions we make.

With success here, we will be at the gates of truly universal coverage and well-poised to get there. Bringing young people into the ranks of the insured; encouraging a “culture of insurance”; learning from the practical experience of actually implementing an “individual mandate” and offering new subsidized programs; and pursuing other initiatives to control health care costs both inside and outside the four corners of health care reform – all of these things will allow us to take the final step to ensuring coverage for absolutely everyone. No doubt, we face many challenges ahead, in continuing an ongoing process of translating the law and the Connector Board’s decisions into concrete actions that affect the lives of people throughout the Commonwealth. But I believe that we have taken a major step forward in creating a framework for ultimate success.

This latest milestone for health care reform is a product of collaboration and compromise. The approach adopted by the Board draws from the best thinking of numerous individuals and groups that are so deeply committed to the success of health care reform that they have spent countless hours working on this issue and helping relative newcomers like me get my bearings. In particular, Jon Kingsdale and his tremendous staff at the Connector continue to be both smart thinkers and good listeners. They have worked tirelessly to develop an effective and humane approach to implementing the “individual mandate,” all the while working feverishly to get people signed up for Commonwealth Care and get the Commonwealth Choice program up and running. My colleagues on the Board shaped this proposal by asking the right questions and contributing creative solutions to difficult challenges. Stakeholders, experts and advocates from diverse perspectives vigorously advanced their own proposals, but were also willing to consider other ideas and were open to compromise. Governor Patrick was not only instrumental at other stages of health care reform (such as during the bidding process for Commonwealth Choice plans) but also steered the Administration’s approach to this critical issue of affordability. And I know that we are all grateful for the continuing guidance and support of members of the Legislature, especially Speaker DiMasi and Senate President Murray.

The fact that the Board’s vote was unanimous and enjoyed support throughout the wide community that cares about health care reform is important well beyond yesterday. With everyone on board, we will be able to go out as a team and do the hard work needed to put health care reform fully into action – to educate people about both new requirements and new opportunities for affordable insurance; to help workers and employers understand the benefits of Section 125 plans; to observe the impacts of the new law; and to work together to overcome the inevitable challenges and obstacles to success.

So, happy birthday health care reform. It’s been a great year. Wishing you many more. And feeling optimistic that you’ll have them.

Leslie Kirwan is Secretary of Administration and Finance for Governor Deval Patrick and chairs the Connector Board

I have to admit that, at the time, I wasn’t thinking about health care reform as a significant part of my job portfolio. But I quickly learned otherwise. As Chair of the Commonwealth Health Insurance Connector, I’ve found myself steeped in the details and decisions of helping to implement Massachusetts’ historic health care reform law. In truth, barely a day goes by when I’m not spending at least some of my time wrestling with the particulars of putting health care reform into action.

Now, my prior professional experience centered on public finance – not public health – so I’ve had a steep learning curve for this task. Fortunately, I’ve had the benefit (truly, the privilege) of being able to work with and learn from some extraordinary people whose vast knowledge about health care is matched by a deep commitment to making our groundbreaking reform effort a success: Jon Kingsdale and his terrific staff at the Connector; my fellow Connector Board members; Health and Human Services Secretary Judy Bigby; and health care advocates from diverse interests that helped forge common ground and make health care reform a reality in Massachusetts.

Upon becoming Chair of the Connector, I was immediately struck by the progress that had already been made in implementing health care reform – particularly the creation of the Commonwealth Care subsidized health insurance program (now with over 50,000 enrollees) and the enrollment of tens of thousands of previously uninsured individuals in the MassHealth (Medicaid) program. I was also deeply impressed by the commitment and collegiality exhibited by the Connector’s Board members. Despite having other (very demanding) jobs, they have spent enormous amounts of time and energy wrestling with complicated health care decisions that will affect the lives of countless residents of Massachusetts – throughout the process always striving for consensus and treating one another with respect and courtesy. It’s truly a great honor to work with them towards expandi! ng acce ss to quality, affordable health insurance and achieving the immense promise of health care reform in the Commonwealth.

Last week was a major milestone in that effort. On Thursday, the Connector awarded its “Seal of Approval” to a wide variety of health care insurance plans. These plans will be available for individuals and small businesses to purchase through the Connector starting in May. This was the culmination of a process that started with initial bids that came in at higher prices than many of us hoped for. But through cooperation between the Connector, insurers, and Governor Patrick – who personally asked insurers to “sharpen their pencils” and help find ways to reduce costs – a second round of bids yielded much better prices. With the final bids, the average uninsured person living in the eastern part of Massachusetts will be able to buy quality health insurance including drug coverage for as! low as $175 per month. Notably, even the most “basic” plans to be offered through the Connector cover preventive care prior to the payment of deductibles – and many cover all doctors’ office visits pre-deductible.

Of course, many important decisions lie ahead for the Connector. For example, on March 20, the Board will meet to vote on draft regulations to define minimum creditable coverage – the minimum level of health insurance that would satisfy the health care reform law’s “individual mandate” (requiring Massachusetts residents to have health insurance coverage). In developing these regulations, the Board will have to address and balance issues of affordability, choice, and the importance of ensuring quality coverage and care. Then, in April, the Connector will begin considering how to implement the “individual mandate,” including providing exceptions for people who lack access to affordable health insurance.

Meanwhile, the Legislature has begun working on the state budget for fiscal year 2008, which includes funding for health care reform. I was very proud that, in a challenging fiscal environment, the budget filed by Governor Patrick in late February provided the resources to keep health care reform moving forward. I know that the Administration looks forward to working with the Legislature in the coming months to make the needed investments in health care reform and other crucial health initiatives.

There are many challenges that lie ahead in implementing health care reform. But I am confident that all who have a part in making this law the success it can and should be will rise to the occasion – and keep Massachusetts moving forward on the path towards offering the quality, affordable health insurance that the people of our state need and deserve.

Leslie Kirwan is the Secretary of Administration and Finance for Governor Deval Patrick