…and the rest of the story

Massachusetts Health Reform

Kaiser Family FoundationAlliance for Health Reform

Grace-Marie TurnerGalen Institute

May 19, 2008

Massachusetts Connector optionsMassachusetts Connector options

Four premium levels for similar coverage Four premium levels for similar coverage through the subsidized Commonwealth through the subsidized Commonwealth Care programCare program

Approved health insurance plans offer Approved health insurance plans offer coverage through the unsubsidized coverage through the unsubsidized Commonwealth Choice planCommonwealth Choice plan

Commonwealth Care Commonwealth Care Enrollment Nov ‘06 – Dec ‘07Enrollment Nov ‘06 – Dec ‘07

Enrollment (thousands) as of the first of the month

0

20

40

60

80

100

120

140

160

Nov '06 Dec '06 J an '07 Feb '07 Mar '07 Apr '07 May '07 J un '07 J ul '07 Aug '07 Sep '07 Oct '07 Nov '07 Dec '07

Premium-paying

No premium

Commonwealth Care Commonwealth Care Enrollment Sept ‘07 – May ‘08Enrollment Sept ‘07 – May ‘08

Enrollment (thousands) as of the first of the month

0

50

100

150

200

Sep '07 Oct '07 Nov '07 Dec '07 J an '08 Feb '08 Mar '08 Apr '08 May '08

Premium-payingNo premium

Summary of Costs by Plan TypeSummary of Costs by Plan Type

Plan 1Plan 1 Plan 2Plan 2 Plan 3Plan 3 Plan 4Plan 4

Monthly Monthly PremiumPremium

$0$0 $0-$35$0-$35 $70-$70-$105$105

Depends Depends upon plan upon plan choicechoice

Max OOPMax OOP

(Med/Rx)(Med/Rx)

$36 / $36 / $200$200

$250 /$250 /

$250$250

$500 /$500 /

$500$500

Phased Phased out 7/1out 7/1

Largest enrollment in no-cost plansLargest enrollment in no-cost plansEnrollment by Plan Type as of May 1st

Total: 176,879 enrolled individuals

Type 1 (0-100% FPL), 79,039,

45%

Type 2A (100-150% FPL),

47,469, 27%

Type 2B (150-200% FPL),

29,234, 17%

Type 3 (200-300% FPL, low

premium), 16,716, 9%

Type 4 (200-300% FPL, low copays), 4,421,

2%

Enrollment in Enrollment in Commonwealth ChoiceCommonwealth Choice

14,69815,922

17,161 17,490 17,907 18,122

0

5,000

10,000

15,000

20,000

Dec '07 Jan '08 Feb '08 Mar '08 Apr '08 May '08

1. Enrollment (members) as of the first of the month

Typical connector pricesTypical connector prices

CoverageCoverage Annual premiumAnnual premium

Young adultYoung adult $$2,0002,000 deductible deductible $2,280$2,280

HMO/ no ded.HMO/ no ded. $6,096$6,096

Young familyYoung family $1,500/$3,000 ded.$1,500/$3,000 ded. $7,200$7,200

HMO/ low ded.HMO/ low ded. $18,300$18,300

Empty-nest coupleEmpty-nest couple $2,000/$4,000 ded.$2,000/$4,000 ded. $7,800$7,800

HMO/ no ded.HMO/ no ded. $21,804$21,804

0

40,000

80,000

120,000

160,000

200,000

240,000

280,000

Medicaid Enrolled Paying somepremium

300+%

Enrolled Yet to be addressed

Est.: 89,000

Est.: 207,500

Est.: 228,000 *

87,000*

176,000

Commonwealth Care

} 48,961 17,000

Connector coverage through March 1, 2008

Risks moving forwardRisks moving forward

For consumers…For consumers…– State approved a 12% insurance rate increase State approved a 12% insurance rate increase

for next yearfor next year– Fines to individuals continue to riseFines to individuals continue to rise

$219 in first year$219 in first year

Up to $912 this year; $1,824 for uninsured couplesUp to $912 this year; $1,824 for uninsured couples– Shortage of doctors in some areas taking new patientsShortage of doctors in some areas taking new patients

Rising costs for taxpayersRising costs for taxpayers

Crowd-out of job-based insuranceCrowd-out of job-based insurance

Taxpayer costs are risingTaxpayer costs are rising

State budget calls for $869 million in fiscal State budget calls for $869 million in fiscal 2009, but the bill could be closer to $1.1 billion2009, but the bill could be closer to $1.1 billion

About 330,000 Massachusetts residents are About 330,000 Massachusetts residents are newly enrolled in coverage, but at least 263,000 newly enrolled in coverage, but at least 263,000 are in free or subsidized plansare in free or subsidized plans

Concerns about crowd-outConcerns about crowd-out

Up to 40,000 workers are offered health insurance at Up to 40,000 workers are offered health insurance at work, but can’t afford the premiums and earn under work, but can’t afford the premiums and earn under 300% of poverty. 300% of poverty.

Workers eligible for Commonwealth Care can switch Workers eligible for Commonwealth Care can switch from job-based coverage, under certain conditionsfrom job-based coverage, under certain conditions

The employee share of job-based coverage often costs more The employee share of job-based coverage often costs more than subsidized Commonwealth Care. E.g. $70/mo vs. 39/mo. than subsidized Commonwealth Care. E.g. $70/mo vs. 39/mo.

If only 10% of those eligible shift from job-based insurance to If only 10% of those eligible shift from job-based insurance to C-Care, the total cost next year alone could be an additional C-Care, the total cost next year alone could be an additional $90 billion, potentially reaching $550 billion by 2012 for this $90 billion, potentially reaching $550 billion by 2012 for this population.population.

Growing pains?Growing pains?

Or are the costs and complexities of major Or are the costs and complexities of major changes to the health sector, even in a state changes to the health sector, even in a state that had a head start on the rest of the that had a head start on the rest of the country, far greater than anticipated?country, far greater than anticipated?

Example: Just one set of regulations by one Example: Just one set of regulations by one of Massachusetts’ new health reform boards of Massachusetts’ new health reform boards and commissions to deal with just one and commissions to deal with just one problem…problem…

Minimum Coverage Standards -- 2009Minimum Coverage Standards -- 2009

Prescription drug coverage.Prescription drug coverage.

Visits to the doctor for preventive care, before a deductible.Visits to the doctor for preventive care, before a deductible.

Deductibles that are capped at $2,000 for an individual or Deductibles that are capped at $2,000 for an individual or $4,000 for a family each year.$4,000 for a family each year.

An annual cap on out-of-pocket spending at $5,000 for an An annual cap on out-of-pocket spending at $5,000 for an individual or $10,000 for a family (for plans with up-front-individual or $10,000 for a family (for plans with up-front-deductibles or co-insurance). deductibles or co-insurance).

No cap on total benefits for a particular sickness or for a No cap on total benefits for a particular sickness or for a single year.single year.

No cap on payment toward a day in the hospital.No cap on payment toward a day in the hospital.

1515

2008 Draft Affordability Schedule 2008 Draft Affordability Schedule Proposed March 20Proposed March 20thth

Individuals Couples Families

Annual Gross Income Range

2008 Proposed

Annual Gross Income Range

2008 Proposed

Annual Gross Income Range

2008 Proposed

$0 - $15,612 (150%) $0 $0 - $21,012 (150%) $0 $0 - $26,412 (150%) $0

$15,613 - $20,808 (200%) $39 $21,013 - $28,008 (200%) $78 $26,413 - $35,208 (200%) $78

$20,809 - $26,016 (250%) $77 $28,009 - $35,016 (250%) $154 $35,209 - $44,016 (250%) $154

$26,017 - $31,212 (300%) $116 $35,017 - $42,012 (300%) $232 $44,017 - $52,812 (300%) $232

$31,213 - $37,500 (360%) $165 $42,013 - $52,500 (375%) $297 $52,813 - $70,000 (398%) $352

$37,501 - $42,500 (408%) $220 $52,501 - $62,500 (446%) $396 $70,001 - $90,000 (511%) $550

$42,501 - $52,500 (505%) $330 $62,501 - $82,500 (589%) $550 $90,001 - $110,000 (625%) $792

>$52,501 n/a >$82,501 n/a >$110,001 n/a

Signing ceremonySigning ceremonyApril 12, 2006April 12, 2006