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Affordability target keeps moving as
state and insurers develop new plans
By Priscilla Yeon January 24, 2007...A lawmaker who was influential in the development of the new health care law said Wednesday that he would like a state agency overseeing the implementation of the law to come up with premiums that are lower than the ones he originally advocated for. Sen. Richard Moore, who was the co-chairman of the Committee on Health Care and Financing in the past legislative session, said recent research has caused him to change his mind about premium affordability for people who are uninsured and will be mandated to purchase insurance on July 1. Moore said he no longer thinks $320 would be a reasonable monthly premium level for uninsured individuals who earn more than $29,400. “I think it’s not affordable for most of that clientele, so 250 (dollars) is probably better,” said Moore. He said he has shared his new view with Rep. Patricia Walrath, who co-chaired the committee with him. “What I thought would be reasonable is actually too expensive to folks.” Moore’s disclosure today came as the leader of a health care advocacy group that was intricately involved in the law’s formation said groups of people may need to be waived from the law’s mandate to have health insurance. Moore referred to a report by the Greater Boston Interfaith Organization (GBIO), which plans to release the study on Thursday. According to Ari Lipman of the Greater Boston Interfaith Organization, the report analyzes comments gathered from 630 people earning between 100 and 500 percent of the federal poverty level on the affordability aspect of the new law. Lipman declined to comment any further on the report. At a hearing last August, GBIO representatives said 110 low-income individuals had filled out worksheets designed to develop a better understanding of how much poor families believe they can pay in monthly health care costs. Responses indicated it's between 1 and 2 percent of gross income, GBIO officials said at the hearing, where they mentioned that many families screened had serious cash flow problems and are overly dependent on credit cards. In November, Moore and Walrath wrote to the Connector Authority saying the board "misrepresented" the Legislature's intent by stating legislators agreed with former Gov. Mitt Romney’s administration recommending $200 average monthly premium for minimum coverage. The letter stated that $200 was "unrealistically low" to adequately cover benefits. “During the development of Chapter 58, legislative support was clearly in favor of health care coverage with comprehensive benefits and reasonable deductibles,” the letter said. “For this reason, the Legislature used a target figure of $320 in its projections, a fact publicly discussed at the time of the law's passage.” “That was based at that time on what we thought was affordable,” he said. “The Romney Administration was guessing. I don’t think the Romney’s numbers were substantiated; they were just picking those numbers. That was a political figure. Our figure was based on what we thought was going to be available, no one knew much about it. But we don’t want people not eating or not paying rent.” Given the pioneering nature of the law, Moore said, it’s not surprising that changes are necessary. Walrath said $320 was a “conservative number” that the Legislature based on what the state’s insurers said it would cost for a “comprehensive plan.” Asked today if $320 was a reasonable premium for people who make between 300 and 400 percent of the poverty level, Walrath said “it is questionable.” “The Connector will have to determine what affordable is,” she said. Walrath then said. “We’d like it to be less than that, but 320 should get them a very good health plan, but not 200, no, that would probably have a super high deductible.” Later, in a statement sent to the News Service through an aide, Walrath said she knew when the law passed that $320 was not going to be affordable to all the uninsured people who are not eligible to receive subsidized insurance. “My priority in the Health Care Access bill was to make sure that people get quality insurance with good coverage. Based on the information we had, we thought good insurance would cost an average of $320 per month. We knew this might be too much for some people, so we created an “affordability standard” for the Individual Mandate – the Connector Board will set a standard of what is affordable for people at different income levels and if affordable insurance isn’t available for someone, the Individual Mandate won’t apply. We’re going to study carefully what happens as the bill is implemented and make adjustments as we need to,” she stated. The law, which seeks to expand health insurance to nearly all the uninsured residents in the state, offers state subsidized and non-subsidized insurance products to individuals and families based on their income. The Connector is struggling with the daunting task of establishing health plans that are affordable while providing what the group considers to be minimum coverage. To avoid facing financial penalties, all individuals have to be enrolled in plans that meet the Connector’s “minimum creditable coverage.” Recently, insurers proposed plans that on average would cost $380 a month. The premium was widely criticized and the Connector Board is working with insurers on alternatives. The Connector Board has revised its criteria for minimally acceptable coverage and plans to re-submit bid proposals to carriers. Members said they are hopeful plans would cost “within the affordable range” based on “a number of carriers.” John McDonough, executive director of Health Care for All, said it would be “too speculative for the moment” to discuss the right premiums for currently uninsured individuals, but said that “anything more than 5 percent of income is getting too high,” for total out-of-pocket cost. Waiving the mandate to uninsured people who earn between 300 to 400 percent of the poverty level is possible because the insurance premiums may be too costly for them. “Based upon what’s being talked about in terms of premiums, we think at the end of the day there will be no choice but some group waivers based on some income,” said McDonough. In response to a reporter’s question about whether the state is feeling pressured to exempt a group of people from the individual mandate based on income, Connector Board Chair Leslie Kirwan said Monday: “I would say we’re going to try very hard to get enough choice within an affordable range and that’s the first goal. We really don’t want to be suggesting that there are other ways to deal with this other than what the legislation contemplated right now.” |