The Commonwealth Health Insurance Connector Authority’s plan to raise enrollees’ monthly contributions to Commonwealth Care, though met with cries of outrage, is a reasonable step in response to escalating costs and unexpected enrollment levels. The proposed rate schedule is very progressive, and the dollar amounts are small – we have already raised the ceiling for zero contribution from 100% to 150% of the federal poverty level (FPL), and increases are $5 up to 200% of FPL, $10 up to 250%, and $15 up to 300%. But why are even these modest increases necessary?
First, there is a state fiscal issue: The budget is already in structural deficit, costs of government are rising (in large part because of health care), there are powerful competing priorities such as education aid, revenues are threatened by an economic slowdown, and tax increases are off the table (with a proposal to eliminate the personal income tax headed for the ballot).
Second, the federal government is critically involved because it must approve the state’s Medicaid waiver, and commit itself to paying a 50% share of the cost of MassHealth programs; and the President has proposed reducing Medicaid funding in next year’s budget.
Third, if we make the state’s programs more favorable than those available through employers, we risk precipitating a shift to the public side with attendant runaway costs (and a waiver issue as well). Even with a $15 increase, Commonwealth Care enrollees in the 251-300% of FPL range will be paying less (for family coverage, considerably less) than the 80% of people in that income range with employment-based insurance. The Connector staff has estimated that if one percent a year of the 650,000 employees at or below 300% of the FPL who receive health insurance from their employers shift to publicly subsidized coverage, the net cost to the Commonwealth Care program will be approximately $100 million in 2011.
All of us would prefer (at least in principle) to control costs. We are making some progress; the recent bids for Commonwealth Choice were up only about 5%. Until we unite to tackle cost drivers head on, however, this difficult choice is one we must face regularly.
Richard Lord, President and CEO, Associated Industries of Massachusetts
Can you explain, then, why there are 25-100% increases planned for copays?
They will not generate enough revenue to fix the fiscal problem, so that cannot be the reason. There is no evidence to suggest that copays will have an impact on the crowd-out that you are worried about, so that cannot be the reason.
So, please explain to me why the Connector – charged with expanding health care in Massachusetts – is planning to discourage preventive health care. The increase in copays will cost my family an additional $50 a month on average. That is money we do not have. Having an insurance card doesn’t mean much if it cannot be used. When people avoid necessary tests and check-ups to avoid copays the whole system will pay for it on the back end.
Rick has been a valuable member of the Connector Board, and is committed to successful implementation of Commonwealth Care and reform in general. But we disagree strongly with his views on this issue.
First on the fiscal issue, Rick argues that the Connector should raise the affordability standards, copays and premiums to save state funds. However, the touchstone of health reform is affordable coverage. We can’t keep raising the price for low income people to meet state funding shortfalls. Without a rigorous affordability analysis, the premium increases are simply shifting costs onto those without an ability to pay. At a time when the state is contemplating reducing corporate taxes, does it make sense to raise taxes on the poor?
Increasing copays is particularly bad policy, both medically and fiscally. Medically, numerous studies have shown that copays discourage poor people from seeking necessary care. This leads to higher hospital costs in the long run. Fiscally, increased copays reduces program spending, and thus reduces federal reimbursements. In effect, we only get to keep half of the copays we collect. The other half we give to the federal government. It is the most counterproductive way of cutting costs for the Commonwealth.
Second, Rick argues that the Bush administration would like to see higher copays and premiums. This may be true in a general sense, but we’ve heard no specific demand from the federal government on this issue. The Bush administration approved our current structure.
Third, Rick argues that CommCare copays and premiums should go up to prevent employers from dropping coverage of their workers. This argument assumes some convoluted connection between an employer’s decision on whether or not to offer coverage, and whether copays for a generic drug are $10 or $15. But there’s no connection between the two.
For employers, the key determinant is their costs of offering coverage, not benefits available to some employees. Studies have shown no effect on offer rates based on public programs. The Connector already enforces a 6-month lockout if employers drop coverage, and so far we’ve seen little crowd out.
We urge Rick and other Connector Board members to put themselves in the shoes of low-income patients with serious medical needs. For more information, checkout out this ACT!! Commonwealth Care page, featuring real life examples of the impact of increased premiums and copays.
The Herald’s web page today lists the salaries of those who work for the Commonwealth Care Connector. http://www.bostonherald.com/projects/payroll/cca/
I point this out, not because I begrudge any of the Connector Authority’s staff their well deserved income, but merely to remind us all that it takes an enormous leap of imagination which is required to put ourselves in the place of those whose income qualifies for the Commonwealth Care Program.
Seen from the prospective of the poor and near poor, the increases to the premiums and most certainly the increases to the co-payments proposed are anything but modest.The very well may tip the scale between receiving needed care and foregoing it.
Those of us, myself included, who live with the luxury of disposable income must take great care when called on to decide what is affordable for the poor.
Good find, Neil – I am sick just to look at this!
This is the money that is supposed to be goimg toward doctor visits.This is wrong and somebody has to stop it NOW!
http://www.bostonherald.com/projects/payroll/cca/BostonHerald.com
I read in the article that Senator Moore see’s no problem with the cost of this large exspense to the taxpayers.He is out of touch with the rest of us.This is not monopoly money,it’s real and citizens are earning this money on real jobs.Does he have an idea what a real job is?Thank you Neil for letting citizens know where their hard earned money is going.
Definately out of touch. Perhaps the increases seem “modest” to some, but assuredly, to others they are crippling.
On February 14th, two stories appeared in the Globe. One was entitled “Health Plans Sold via State Likely to Cost 5% More,” and the other was “One in Ten Patients Gets Drug Error.” Most people may not see any correlation between these two articles, but it is time for us to connect the dots. Both articles are indeed related to the same critical issues – the true cost of health care and how to produce better results in terms of cost and quality care for the citizens of Massachusetts.
Health insurance rate increases do not magically go down based on the Connector flexing its muscles with the insurers as one would believe by reading Ms. Dembner’s article, where she states that “the Connector had pressed insurers to curb increases… in the hope that they could set an example for the larger insurance market.” If the Connector Board believes that is all they need to do to produce lower rates, they do not have enough understanding of the market.
Now, consider the impact of reducing medical errors in our hospitals. The Globe article focused on results of drug errors in six community hospitals, but Ms. Wen brings in some really important information from a recent study released by the New England Healthcare Institute. The study estimated that “the average victim of a medication error stays in the hospital at least four extra days.” So, who pays for this? And what impact does the resulting malpractice liability claim have on the cost of health care?
These are issues we need to be looking at if we want to bring about affordability in health care. The Connector is not going to bring about affordability. The carriers are not going to bring about affordability, other than to increase copays here and there, tighten up their drug formularies, or shave a couple of points off their administrative costs.
We need to be looking at the underlying cost drivers. One of the best outcomes of our state’s health care reform legislation was the creation of the Health Care Cost and Quality Council. We must continue to devote state resources and priorities to support their work in bringing health care transparency and improved information technology to our residents. Health care reform will not be successful if decisions are made by people who do not fully understand the complexity and relationship of health insurance to health care. It is time to redirect our reform efforts away from the Connector and its emphasis on building a state-funded distribution model for health insurance products, and instead turn to a proactive model of health care reform.
The Massachusetts Association of Health Insurance Underwriters (MassAHU) looks forward to continuing the constructive debate on health care reform. Representing the needs of the thousands of employers who purchase health insurance in this state, MassAHU is committed to the continued participation in the Health Care Cost and Quality Council.
Neil, you’ve got to be kidding!!
“…the salaries of those who work for the Commonwealth Care Connector. http://www.bostonherald.com/projects/payroll/cca/
I point this out, not because I begrudge any of the Connector Authority’s staff their well deserved income…”
What the hell is “well deserved” about what they do?!!!! How does even a single one of these bureaucracy hacks do anything to provide health care? Please, spell it out for us, seriously.
Rosemarie Day $180,765.00 (NOT even full time)
Deputy Director & Chief Operating Officer
Jamie Katz $168,713.00
General Counsel
Edward DeAngelo $100,485.00
Assistant General Counsel
Joan Fallon $178,938.00
Chief Communications Officer
Kevin Counihan $176,313.00
Chief Marketing Officer
Patricia Andriolo-Bull $143,150.00
Director of Commonwealth Choice
Paul Wingle $106,575.00
Director of Outreach – Commonwealth Choice
Cheryl Ierna went from $47,200.00 TO $106,200.00
(NICE RAISE)
Manager of Strategic Accounts
Melissa Boudreault $144,200.00
Director of Commonwealth Care
Steven McStay FROM $36,538.00 TO $100,000.00
(NICE RAISE)
Commonwealth Care Project Manager
Robert Carey $145,000.00
Director of Planning & Development
Dominic Divito $117,588.00
Director of Accounting
Robert Nevins $156,443.00
Chief Information Officer
Michael Norton $116,725.00
Manager of MMCO Contracts
Ross Weiler $120,000.00
Director of Client Development & Management
Jon Kingsdale $231,750.00
Executive Director
Patrick Holland $180,250.00
Chief Financial Officer
Reuben Kantor $65,000.00
Manager of Grassroots Outreach
Richard Powers $100,205.00
Director of Public Affairs
This fake and failing reform plan is a mostly just a huge scam and a rip-off in more ways than we can even keep track of and no one on Beacon Hill seems to care. They must be too busy playing golf and helping out other politicians’ political campaigns. Or cowering under the orders of “leadership”. SiCKening.
Increases in co-pays do make a difference and can have the result of low and moderate income people not getting the care they need. For insight into what the impacts of co-pay increases will be, check out a statewide survey that Community Partners just conducted of people who enroll folks into CommCare. http://www.compartners.org/pdf/misc/2-26-08_cc_copay_survey_report.pdf
I would also remind us that health care reform was built on the principal of shared responsibility and a three-legged stool- govt, employers and individuals. Co-pay and premium increases certainly focus on the individual component.
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