| 2. Personal mandate questions:
Even with the subsidies for lower-income folks, aren't we reaching into the pockets of people least able to pay by making them pay for their insurance?
The vast majority of folks newly eligible for Commonwealth Care coverage will be much better off financially with quality, affordable coverage. We are concerned the premiums levels approved on 9/1/06 by the Board of the Insurance Connector will not be affordable for many adults between 100 and 300%fpl. We will watch the program carefully and advocate to the Connector Board and to the Legislature to lower of premiums if our predictions bear out. There's ample time for this to occur.
If you make, say, $30,000 and have no insurance, will you be now mandated to spend some $350 a month to insure yourself? And if not, doesn't that leave a "doughnut hole" of uninsured folks -- too "rich" for a subsidy, but not rich enough to afford insurance?
The set of decisions on whom the individual mandates penalties will fall will not be made until spring 2007. Some believe the "individual mandate" penalties will fall on everyone. The statute does not say this, and gives the Connector Board the responsibility to grant categorical (income-related) and individual exemptions. If the Connector Board defines this in a manner that deviates from legislative intent, legislative leaders have made clear their willingness to intervene.
What about the effect on young people -- If you're a 23-year-old waiting tables, with a lot of debt, isn't it an enormous disincentive to live in Massachusetts and have to pay to insure yourself, too?
We do not believe individuals in the circumstance you describe will be penalized if affordable insurance is not available to them. Also, beginning next year, adults 26 and under will have new and more affordable insurance options available to them that do not now exist. 4. The law calls for new, inexpensive insurance "products" be created. How expensive will the new "cheap" insurance products be? Will they be good coverage, or merely nominal "insurance"?
There are two categories of new insurance products to be created. Adults with incomes below 300%fpl will be eligible to enroll in Commonwealth Care products. Enrollees between 100 and 300%fpl will pay income related premiums, and those with incomes under 100%fpl will pay no premiums. No Commonwealth Care products will include deductibles, and will include modest co-payments for everyone. These products, for the first three years, will only be offered by the four existing Medicaid managed care plans in Massachusetts: Neighborhood Health Plan, Fallon Health Plan, Boston Medical Center's HealthNet, and Cambridge Health Alliance's Network Health. These are all Massachusetts-based and non-profit health plans with high quality reputations.
Adults with incomes above 300% fpl - and small employers - will be eligible to purchase new Connector products beginning on July 1, 2007. These can be offered by any licensed insurer in the Commonwealth. We do not expect to see these products until the spring of 2007. Which products receive the Connector's "Seal of Approval" will be determined next year under a new governor (your guess as good as ours). They will include all current benefits mandated under Massachusetts law. There will be different products available with different levels of deductibles. The "affordability" formula relative to the individual mandate will include deductibles as well as premiums. It is expected these products will require use of narrower provider networks as a way to achieve significant premium reductions. Also, through the Connector, uninsured individuals will be able to obtain coverage on a pre-tax basis even if their employers do not provide coverage.
We won't know until we see these products in the spring what they will look like and what they will cost.
The health reform statute, Chapter 58, includes one other important change - as of July 1 2007 the individual (nongroup) and small group insurance markets will merge into a single market, a change which is estimated to reduce individual premiums by as much as 25 percent and increase small group premiums between 2-8 percent. A commission is working now to estimate the likely impact of the merger.
There are many elements of health reform in motion at the same time. It is a dynamic and unpredictable mix. Lots of folks are playing close attention as this plays out.
5. What about costs? Won't this whole thing blow up in a few years? Isn't the fiscal situation pretty dicey?
According to the legislative conference committee, the overall plan begins operating in the red by year three, FY09. They count it in balance over three years because of projected surpluses in years one and two. Legislative sources suggest this is a worst case projection. We believe there will be financial pressures beginning in FY09 that will need to be addressed, most likely in the spring of 2008. By that time, we expect several hundred thousand formerly uninsured will be receiving Connector coverage. We believe the Legislature and the new Governor will be reluctant to end coverage for these newly enrolled.
The issue of rising health care costs was not a central element of Chapter 58. Chapter 58 set some new efforts in motion, i.e. establishing a Quality and Cost Council, and did not pretend to address this issue comprehensively. Rising medical costs is a serious societal problem with or without Chapter 58. We anticipate a lively and engaged debate on quality and costs in the 2007-08 session of the legislature.
Many folks have said we should address costs before coverage for the uninsured. We make no apology for prioritizing coverage for the uninsured first.
6. What about quality and prevention? Will providers be rewarded for actually providing health, as opposed to merely providing services?
Reforms are included in Chapter 58 along these lines. For example, MassHealth rate increases to hospitals and physicians will be tied to their compliance with new "pay for performance" standards that will require them to improve quality. The State will also be providing new quality and cost information on the Commonwealth's website. For the first time, MassHealth will include a wellness benefit, now being developed for implementation next year.
These are positive steps, though only initial steps. The robust conversation on these matters, we believe, is coming next year.
7. What about the effect of the assessment on small businesses? Won't that make it harder for them to stay afloat? Won't many of them move outside the state?
The $295 assessment on employers who don't cover their workers is regarded by business organizations as minimal. They had a big "high five" all around that they dodged a big bullet in the form of the House/DiMasi 5/7% payroll assessment. That is why no business groups are challenging the assessment in court, as happened in Maryland with the so-called Wal-Mart Tax. The Romney Administration's regulatory definition of the $295 assessment has made it even less threatening.
Businesses that will pay the assessment are concentrated in the service/ retail/ restaurant/ construction sectors, businesses that cannot move out of state and take their business with them. Businesses that can move across state or national borders already provide health insurance coverage to their workers.
8. Is it true that under the law a business will have to reimburse the Free Care Pool for all the care an employee gets? If so, couldn't this destroy businesses with uninsured employees who happen to get sick?
Chapter 58 includes a so-called "Free Rider Surcharge" under which a business with more than 10 workers, whose workers generate more than $50,000 in charges to the Uncompensated Care Pool, can be assessed up to 100% of the costs over $50,000.
Another section of Chapter 58 requires all employers to establish so-called section 125 cafeteria plans with the Internal Revenue Service, enabling workers to obtain coverage through the Insurance Connector on a pre-tax basis even if the employer contributes nothing to the premium.
Employers who create 125 plans cannot be penalized under the Free Rider surcharge. So the surcharge acts as a stick to penalize employers who fail to comply with this part of the law. Once a few employers get hit by the Free Rider surcharge, we expect most employers to quickly (and easily) file to create 125 plans.
9. California's legislature just passed a single-payer health care law, although it's going to be vetoed by their Governor. Why couldn't we pass that kind of a law in Massachusetts?
The California single payer plan is not well understood or explained in media accounts. The big challenge in advancing single payer plans (and any health reform plan) is financing - how much will taxes increase to pay for the plan. The California plan sets up a single payer structure, and defers the question of financing to a later legislation years down the road. In effect, it's a car without an engine. Looks good – ain’t going anywhere. The proponents suggest people will fall in love with the concept and thus happily embrace the financing conundrum later on (which will require at least a two thirds legislative vote to comply with the California state constitution).
In 2002, Oregon voters were offered binding and fully financed single payer initiative allowing new income and payroll taxes of up to 19 percent. That initiative went to defeat, 79 to 21 percent. A binding single payer ballot initiative in California in 1994 went down to defeat 73 to 27 percent. It's a much easier sell if you leave out the financing – like asking someone to buy a car without knowing the price. I question what the vote in the California legislature would have been if it included financing.
10. Is there any health care plan outside the US that you think is a good model for Massachusetts?
There is no system on the planet without serious challenges and stresses. There is no system that does not face regular calls for "reform". The U.S. system is the worst in terms of costs, and among the worst in terms of basic health measures such as life expectancy and infant mortality, and in terms of efficiency and equity; and our system is just plain mediocre in terms of quality. Most Americans who think of other health systems rarely gaze beyond those in Canada and Great Britain - leading the erroneous conclusion that all other systems are nationalized. In fact, most systems have near universal coverage and do it with multiple, not single, payers. And their costs rival those of single payer systems.
It may not be the best - but the Massachusetts system seems to be moving strikingly in the direction of systems in the Netherlands and Switzerland: multiple payers including government, private insurance with heavy regulation, an individual mandate, and assessments on employers. We're interested in learning more about these systems. Like it or not, this seems the direction most consistent with out own.
11. What can people do to get involved in making the new law work better?
In my experience, interest and engagement drops sharply once a law is passed. Not true with Chapter 58 – this is the most active, engaged implementation process on multiple levels I’ve ever seen. It’s quite impressive. Nonetheless, if you’re not in these networks, it’s awfully hard to stay up to date through the mainstream media.
The Affordable Care Today!! Coalition's website (http://www.hcfama.or...) is the best, most up-to-date, and most comprehensive resource on Chapter 58 implementation. Health Care For All's blog (http://blog.hcfama.o...) covers every aspect of health reform on a daily and detailed basis.
The ACT!! Coalition is organizationally based. New organizations are joining on a regular basis. Many individuals have gotten and stayed involved through participating organizations. See the ACT!! website for a list. ACT!!'s coordinator is Fawn Phelps (phelps@hcfama.org).
Interested folks should communicate their ideas and concerns to their state legislators who are also actively involved in implementation. Folks should feel encouraged to write letters to the editor and engage – whatever their views and concerns. Folks should stay in touch with Blue Mass Group which has done a fantastic job staying connected.
Some folks think this new law is terrible and hope it fails. Some folks have a hard time understanding it and hope it leads to something good, and have legit concerns. Some folks support the law and just hope we can make it work.
We view Chapter 58 as a giant step forward. Not the end of the process, yet a major advance and opportunity. If we make this work, the final stage of access will be pretty easy. And there will still be much more needed to fix our crazy health system. |
