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: Read more…
As the need to control health care costs gets more attention, various groups have proposed specific cost containment goals. For example, the Connector Board (of which I am a member) voted to push insurers to limit rate increases for the unsubsidized Commonwealth Choice plans to no more than five percent for next year. A number of parties, including Health Care for All and Senate President Murray, have proposed holding rate hearings for health insurance premium increases at or above 7%. The Quality and Cost Council (QCC) has established a goal of reducing the annual rise in health care costs to no more than the unadjusted growth in Gross Domestic Product (GDP) by 2012.
These goals are ambitious and welcome, but theoretical. What would achieving such goals mean for people with private health insurance? I wanted to find out. So, I looked at the financial reports health insurers file with the Division of Insurance for the three largest private health insurers in Massachusetts—Blue Cross Blue Shield (including HMO Blue), Harvard Pilgrim Health Care, and Tufts Health Plan. I looked at reports for 2003-2006 and analyzed how much medical costs and health plan administrative expenses had increased for people with private insurance (i.e., I excluded the Medicare line of business). Since the Division of Insurance doesn’t require health plans to provide information for people covered by self-insured plans, the financial information that’s publicly available for the health insurers includes only people covered by fully-insured plans—about 2 million people for the three health insurers whose data I reviewed. I analyzed medical and administrative costs on a per member basis, to adjust for any enrollment changes at the health plans.
I assessed two different scenarios: Read more…
Governor Arnold Schwarzenegger recently proposed leasing the California state lottery to a private company as a way to generate revenue for his health reform proposal. Since Governor Schwarzenegger’s health reform plan draws so heavily from the Massachusetts reform law, I’ve been wondering whether our state should also consider linking health reform to gambling, particularly since gambling is such a hot topic in Massachusetts right now. I’ll leave it to the lawmakers to decide whether to allow casino gambling here, but if they do, there might be ways to use casinos to support health reform. In fact, this linkage would be fitting, since we’d be effectively replacing one form of gambling—going without health coverage—with another.
There are all kinds of ways we could use casinos to support health reform. For example, casinos might be a wonderful new location to provide education and outreach about the new state’s new coverage options and responsibilities. Imagine an entire social marketing campaign conducted through slogans on poker chips and cocktail napkins: Health Insurance: We Bet You’ll Love It! Health Coverage: The Wonder of It All! Health Insurance, Oh Yeah! Feel Like a Winner: Get Insured! Bronze with Drug Coverage: The Biggest Little Policy in the World! Read more…
On Friday I met with Lindsay, one of our students at the Harvard School of Public Health and her boyfriend, Andrés, who is a graduate student at another local university. When he enrolled in graduate school, Andrés bought the student health plan offered by the school, since he was required by state law to have health insurance. (Students enrolled in colleges and universities in Massachusetts have been subject to an individual mandate since 1990.) The health plan offered by Andrés’s school meets the state requirements for qualified student health insurance (QSHIP).
Earlier this year, Andrés was diagnosed with cancer. He had surgery and completed radiation therapy treatments. Once the bills started coming in, Andrés discovered that his health insurance plan had a variety of legally permissible but devastating limitations: a $100,000 overall cap on benefits for any one illness, a limitation of $5,000 for high-cost procedures (which included his MRIs and radiation treatments), a severely restricted benefit for anesthesia, and many others. As a result, Andrés now has at least $40,000 in uncovered medical bills. Not the kind of added stress he needs when he’s fighting cancer.
Andrés is exploring whether the Uncompensated Care Pool/Health Safety Net Trust Fund can be a source of financial assistance for some of his bills. And maybe he’ll be able to get some relief from the Boston teaching hospital where he’s being treated.
At least Andrés did get one piece of good news: as a result of health reform, he was able to enroll in a Commonwealth Choice plan that has much more comprehensive coverage than his QSHIP plan, so he now does have the coverage that he needs.
But many other Commonwealth Choice enrollees may find that they aren’t as lucky: one quarter of them have enrolled in the new Young Adult Plans (YAPs) that were modeled in part after the QSHIP regulations. Read more…
As regular readers know, the topics of cost control and affordability of health insurance are starting to dominate the CommonHealth blog. This focus on costs makes sense: as many contributors have noted, the coverage expansions in Chapter 58 will not be sustainable if we don’t find ways to control rising medical spending. If we’re going to get serious about moderating costs, we’re going to need to ask—and answer—some very hard and contentious questions. Here are a few of my top candidates:
#1: What about regulation and supply side planning? Health care costs are higher in the US than any other country for many reasons: administrative complexity, fragmented financing, lots of uninsured people, and the prevalence of profit-making organizations in many sectors. But at the top of the list are higher prices—for drugs, devices, physician services, hospital days–you name the service—along with the lack of effective mechanisms for controlling supply. Our “romance with competition” over the past 20 years has made this problem even more acute, by fostering growing market power within much consolidated provider and insurance systems. While our newest infatuation with quality improvement has much to commend it—who could seriously oppose eliminating overuse and misuse, for example–there’s no evidence that improving quality will do much to stem health care inflation—at least not unless it’s coupled with some limits on prices and supply. Virtually every country that’s been more successful than the US at controlling health care costs—and that would be most other countries—has price regulation and central planning as central features of its health care system.
#2: How can we bring back budgets? And while we’re learning from other countries, we need to take a hard look at health care budgets—another cost control technique that’s used in just about every other health care system. It was no coincidence that the last time we made any progress on moderating medical costs was during the era of capitation—one form of health care budgeting. Read more…
(OK readers – here’s a view of the law no one else has packaged for you. Are there surprises? What stands out? Martha)
If You Build It, Will They Come?
• Which health plan has the most Commonwealth Care members?
Answer: Boston Medical Center HealthNet Plan
• What percent of the people who have enrolled in Commonwealth Care so far are required to pay a premium?
Answer: 17%
• What percent of the estimated number of uninsured people with incomes less the poverty level have enrolled in Commonwealth Care?
Answer: Based on most recent public data I can find, enrolled = 64,000; eligible = ~57,000: 112%
• How much funding for health reform outreach and enrollment is included in the FY08 budget?
Answer: $3.5 million explicitly in the budget (and much more if you count what will be spent for MassHealth outreach and by the Connector).
• How many other states have passed comprehensive health coverage reform laws since Chapter 58 was enacted in April 2006?
Answer: One–Vermont
Shared Responsibility
• How much in total Medicaid rate increases are providers scheduled to receive in fiscal years 2007-2009 under the provisions of Chapter 58?
Answer: $540 million (plus community health centers received increases in the annual budgets for FY07 and FY08)
• How much money does that state estimate it will collect in FY 2007 from employers that did not make a “fair and reasonable” contribution to health insurance?
Answer: $0
• If every adult who was uninsured in Massachusetts when Chapter 58 was enacted were to become insured year-round, at a monthly premium of $175 per month, approximately how much additional revenue would health insurers receive annually?
Answer: Somewhere between $688 million and $1.1 billion
Low: Using the 2006 state survey: 328,000 adults $175 times 12 = $688.8 million
High: Using 2006 CDC estimate: 524,000 times $175 times 12 = $1.1 billion Read more…
It’s Summer, the perfect time for the first ever test on the state’s health coverage law. Take your time…you have one week to get us your answers. Email them to: marthab@bu.edu. We’ll send you back your score. The answers will be posted next Tuesday. There will be some exciting prizes which we will post with the answers.
If You Build It, Will They Come?
• Which health plan has the most Commonwealth Care members?
• What percent of the people who have enrolled in Commonwealth Care so far are required to pay a premium?
• What percent of the estimated number of uninsured people with incomes less the poverty level have enrolled in Commonwealth Care?
• How much funding for health reform outreach and enrollment is included in the FY08 budget?
• How many other states have passed comprehensive health coverage reform laws since Chapter 58 was enacted in April 2006?
Shared Responsibility
• How much in total Medicaid rate increases are providers scheduled to receive in fiscal years 2007-2009 under the provisions of Chapter 58?
• How much money does that state estimate it would collect in FY 2007 from employers that dif not make a “fair and reasonable” contribution to health insurance?
• If every adult who was uninsured in Massachusetts when Chapter 58 was enacted were to become insured year-round, at a monthly premium of $175 per month, approximately how much additional revenue would health insurers receive annually?
• If every person who is eligible for Commonwealth Care were to enroll, approximately how much money will be left in the Health Safety Net Trust Fund?
• Why is June 30, 2008 a critical date for Massachusetts health reform?
Coverage and Costs
• Suppose you are a resident of Boston (who’s older than 26), you aren’t eligible for employer-sponsored health insurance, Medicaid or Commonwealth Care, and you’re looking for health insurance to comply with the individual mandate. If you consider only products sold by four health insurers (Blue Cross Blue Shield, Harvard Pilgrim, Neighborhood Health Plan and Tufts Health Plan), how many different products would you need to review to ensure that you’ve exercised fully your newly-granted right of greater choice?
• If you live in Boston and get a job working for the Commonwealth of Massachusetts, how many different health insurance options would you have?
• What’s the approximate average monthly premium contribution paid by a worker in Massachusetts who has employer-based health insurance?
• What’s the lowest monthly premium available to a 27-year-old hospital worker in Massachusetts who lives in Boston and buys a Commonwealth Choice product?
• Assume this person is not eligible for Medicaid, Commonwealth Care or employer-sponsored insurance, and does have to comply with the individual mandate. If there is no increase in Commonwealth Choice premiums in 2008, what penalty will this person have to pay if he or she does not purchase insurance in 2008?
• What would the penalty be if this person were 60-years old instead of 27?
• What is the annual permissible limit on covered medical expenses in a Young Adult Policy?
• Suppose you are a young adult living in Boston who purchases the least expensive Young Adult Plan sold through the Connector. You have a bad car accident and incur hospital costs of $70,000. How much more will your out-of pocket expenses be than if you had purchased the most comprehensive policy available to you?
Who Said It?
• “I don’t like calling it [the Massachusetts reform law] universal coverage. That smacks of Hillarycare.”
• “Half-jokingly” refers to insurers as ‘sleazeballs and bloodsuckers’.”
• “My status symbol is my brown felt hat from Botswana.”
• “Section 125 is not sexy.”
• “The real measure of success is not just access to health insurance. It’s not even access to health care. What we want is improved health.”
Not Just Health Coverage
• How many state entities were affected or created by Chapter 58?
• Name three specific goals proposed for FY 2008 by the Health Care Quality and Cost Council.
• What company is coordinating the new statewide infection prevention and control program?
• What was the overall Massachusetts ranking in the recent Commonwealth Fund “State Scorecard on Health Systems Performance”?
• Where did Massachusetts rank in the category “Avoidable Hospital Use and Costs”?
Pot Pourri
• Name 5 of the top 20 employers in Massachusetts that have 50 or more employees using public health assistance programs.
• Approximately what percent of non-US citizens living in Massachusetts have no health insurance?
• Which Red Sox players are featured in the Connector’s “I’ve Got It” TV ad?
• Name two of the tag lines in the health reform advertising series “Because…”
• What WBUR Commhealth blog entry has generated the most reader comments?
Finale: for Extra Credit
• Submit a health reform haiku (in 5-7-5 format)
Maybe I’ve had too much free time while on vacation in Wyoming (where 18% of adults and 10% of kids are uninsured), but I’ve been thinking about transparency. The latest infatuation of many pundits in health care, transparency is the notion that if consumers have more information on costs and quality, they’ll become a potent new force for improving care and moderating health care spending. Although I am deeply skeptical that transparency will have any real impact on costs (a topic for another blog entry), I think consumers should know much more about the quality and cost of their health care. But while we’re pushing transparency in health care, let’s not forget about health plans. In the new world of health reform, there’s lots more we need—and are entitled —to know about where our health insurance dollars are going.
Health plans are perhaps the biggest “winner” in Chapter 58: they are likely to get hundreds of thousands of new members, both from the expansions of public coverage through Medicaid and Commonwealth Care and from a growth of private coverage because of the individual mandate. Most people in the state are now required to purchase health insurance or pay tax penalties. Since buying health coverage is no longer really voluntary, the public has a right to know much more about the health insurance system. And health plans should expect to be subject to a much higher level of accountability to us for the prudent use of our money. Read more…
The Uncompensated Care Pool (Pool) is a critical part of the health care safety net in Massachusetts, and one of the most misunderstood. Though the health reform law emphasizes – and has achieved – increased coverage, the future shape of the Pool, which helps to finance and share the costs of care for the uninsured and underinsured with limited means, is one of the next big issues in health reform. Read more…
Yo Jack,
Great to see you at the family dinner last week. I loved hearing your band’s new song, Naked on the Inside, particularly now that I understand that it’s not a tale of adolescent angst and the search for connection, but just about sex.
So, you had a lot of good questions about the state’s new health insurance law.
I agree, it’s weird that the state called its new health plans “Commonwealth Choice” when lots of people won’t have a choice about whether or not to buy them. I’ll pass that comment along to the people who make up the names. I can also understand why you think it’s age discrimination that the plans don’t cover the costs of tattoos, piercings, and herbal medicine. Read more…