Last Thursday, the Connector Board took a major step forward in implementing the health reform law. The Board unanimously endorsed a broad range of product choices from seven carriers, including Harvard Pilgrim. These products will be available on May 1st, with coverage effective July 1st. Consumers will be able to choose from a range of plans – comprehensive to basic – and many individuals will be able to buy on a pre-tax basis, significantly reducing their cost of coverage. Given the high cost of health care in Massachusetts, the fact that consumers will have more affordable options is very good news.
But the really hard work is just beginning. In a few weeks the Connector Board will define the minimum level of coverage a person must have to comply with the individual mandate. The board will also determine who, if anyone, should be exempt from the individual mandate. Individuals who do not have coverage that meets the minimum standard and who are not exempt from the mandate will be required to pay a tax penalty. I urge the Connector Board to proceed cautiously with these decisions.
For health reform to succeed, we need to persuade those without coverage to buy it and those with coverage to keep it. If we set the minimum standard too high we defeat the purpose of the law by making it difficult for those without coverage to buy. If we also require those who are currently insured to “buy up”, we risk an unintended backlash.
By setting a minimum coverage standard, Massachusetts will be the only state in the nation to define a floor for adequate coverage. As one of the only states in the nation to lose population in recent years, we need to create a climate where people want to live and bring up their families and where employers can create and grow jobs. Setting the minimum coverage standard too high could impede our ability to remain economically competitive.
Setting the affordability standard is a problem that may be even thornier. An individual mandate is critical to the financial viability of the health reform law. Through universal participation we reduce our reliance on the uncompensated care pool, allowing us to use these funds to provide people with coverage. We also create a broader insurance risk pool, which ensures that the merger of the small group and nongroup markets does not precipitously raise costs for our state’s small businesses. Some individuals with unique financial circumstances may need exemptions, but we will jeopardize the financial foundation of health reform if we weaken the mandate substantially.
Universal participation, consumer choice, and building on the realities of the current marketplace are key to successful implementation of the next phase of the law.
To: Bruce Bullen, COO Harvard Pilgrim Health Care
From: AE Malone, RN, MSN, Community Health Nurse and Clinical Instructor in Nursing, UMass Boston
Re: your statement here “we will jeopardize the financial foundation of health reform if we weaken the mandate substantially. Universal participation, consumer choice, and building on the REALITIES OF THE CURRENT MARKETPLACE are key to successful implementation of the next phase of the law.”
Mr. Bullen, could you please help us understand the following: Harvard Pilgram Health Care (HPHC) seems to be joined at the hip in a serious way with UnitedHealth HMO, a MEGA FOR-PROFIT INSURANCE CO.
Many are wondering, is HPHC still be enjoying its “Public Charity” tax exempt status (sales, property) in our state? Meaning that HPHC is greatly subsidized by the oh so generous taxpayers of Massachusetts.
Is this an aspect of the “realities of the current marketplace” that you refer to in you post?
Readers might be interested in the final paragraph below from a HPHC press release about your merger with UnitedHealth HMO. It gives me the feeling that the taxpayer-subsidized “non-profit” status of HPHC is not appropriate any longer. If anyone understands this business relationship (I’m a nurse not a lawyer), could you please speak to it here? Perhaps someone from the Division of Public Charities in Attorney General Martha Coakley’s office could perform this public service for us. Thanks; I’m sure that many readers will be checking back for your commentary, or at least for a reference to relevent State Public Charities Regulations for clarification.
The following Press Release is from the HPHC website
“Newsroom:
Harvard Pilgrim Health Care and UnitedHealth Group form strategic business and marketing alliance
Relationship Strengthens Consumer Access and Affordability [Ann's note: yeah, right]
Minneapolis, Minnesota (August 6, 2004) – UnitedHealth Group (NYSE: UNH) and Harvard Pilgrim Health Care (Harvard Pilgrim) announced today that they have agreed to form a strategic business and marketing alliance to improve service and overall value for national, self-insured customers….
Forward-Looking Statements
This news release may contain statements, estimates or projections that constitute “forward-looking” statements as defined under U.S. federal securities laws. Generally the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and similar expressions identify forward-looking statements, which generally are not historical in nature. By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. A list and description of some of the risks and uncertainties can be found in our reports filed with the Securities and Exchange Commission from time to time, including our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Except to the extent otherwise required by federal securities laws, we do not undertake to publicly update or revise any forward-looking statements.”
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Another health policy wonk shared this with me recently about the Harvard Pilgram/UnitedHealth “relationship”:
My understanding of the strategic alliance between Harvard Pilgrim and United is as follows: Each company will have access to the other’s network. Also, HPHC entered into a 10 year contract with United to switch over all of its technology based systems to United’s platform. The contract is worth more than $600 million over ten years to United. HPHC had been working with Perot Systems before this agreement was reached.
So, Mr. Bullen, while the “realities of the current marketplace” and a corporate profit driven privatization mandate may be, as you say, “key to successful implementation of the next phase of the law”, I will argue that this is in no way to be confused with what health reform that is shaped and driven by PEOPLE’S NEEDS and FISCAL STEWARDHIP would look like.
For one example of what that might look like, please have a look at http://www.MassCare.org/legislation
The questions in my prior comment were meant to be taken quite seriously; is Mr Bullen going to reply?
Is someone from the AG’s office going to reply?
Is the blog moderator perhaps in a position to help faciliatate these questions being answered?
Thank you in advance.