This year, Massachusetts Gov. Mitt Romney (R) introduced legislation (HD 4673) to reform health care in his state and to provide health insurance for every resident. The three-part plan, called Commonwealth Care, was rolled out between April and July and entails signing up more residents for Medicaid, allowing insurers to offer lower-cost products, and creating a “safety net” insurance plan that enables uninsured residents to afford insurance. The plan attempts to ensure that people on Medicaid will become better consumers of health care. The governor’s plan is reprinted here in its entirety.
OVERVIEW: CORNERSTONES OF GOVERNOR’S HEALTH REFORM:
- Individual (and Family) responsibility for their own health care
- Accessibility and affordability for all individuals through private insurance coverage
- Safety net care provides subsidy for those who cannot afford private insurance
- All individuals below 100% of federal poverty level have access to MassHealth
- Health care costs transparent to consumers
INDIVIDUAL RESPONSIBILITY–NEW CHAPTER 111A
(Section 14 of HD 4673)
- Beginning 1/1/07 all Massachusetts residents 18 and over required to carry minimum level of health insurance (documented on state tax return) OR show proof of financial security in the form of a $10,000 individual bond.
- Parents responsible for meeting requirement for children under 18.
- Failure to meet requirement would result in loss of state tax refund, placement of state tax in medical escrow account, and individual responsibility for all medical expenses.
- Uncompensated Care Pool is eliminated.
ACCESSIBLE AND AFFORDABLE PRIVATE INSURANCE–COMMONWEALTH CARE HEALTH INSURANCE
(Sections 37 to 86 of HD 4673)
- Merges state-regulated, small group (C.176J) and non-group (C.176M) markets for greater product choice and more affordable rates
- Small group market will be available to individuals in current non-group plans
- No new individual, non-group plans after 1/1/07
- Carriers offering products under Chapter 176J will continue to rate individuals and groups on modified, community-rating basis
- Permitted variables: benefit combinations, age, geography, industry, group size, participation rates, family composition, wellness programs, and creditable prior coverage.
- Prohibited variables: health status, claims experience, gender, race and nationality
- Flexibility in benefit design–carriers may be exempted from mandated benefits but must meet standards of Commonwealth Care Health Insurance Exchange
- Individual ratings
- Waiting periods: None if not insured for last 18 months; all others two months
- Current pre-existing condition laws remain in place.
THE COMMONWEALTH CARE HEALTH INSURANCE EXCHANGE–MANAGING AFFORDABLE HEALTH CARE–NEW CHAPTER 176Q
(Section 87 of HD 4673)
- Independent governmental entity
- Facilitates the purchase of health care insurance through approving affordable products–the Commonwealth Care Seal of Approval
- Creates system for collecting insurance premiums through payroll
- Administers Safety Net Care for individuals between 100% and 300% FPL
- Administers Insurance Assistance for individuals over 300% on sliding scale
- Those eligible to purchase affordable insurance through the Exchange:
- Non-working individuals
- Working individuals at companies that do not offer health insurance
- Working individuals who are not eligible for coverage at their place of business, e.g., part-time, contractors, new employees
- Small business with less than 50 employees
- Self-employed, self-proprietors
- Required benefits for certified insurance plans:
- Preventative and primary care
- Emergency services
- Surgical benefits
- Hospitalization benefits
- Ambulatory patient care
- Mental health benefits
- Prescription drug coverage
SAFETY NET CARE–NEW CHAPTER 176R
(Section 88 of HD 4673)
- Provides premium assistance for residents between 100% and 300% FPL who are not eligible for existing government programs
- Available to residents of Commonwealth for previous 12 months
- Not available to those who are eligible for MassHealth, Medicare, or student qualifying for student health insurance program
- Employer does not contribute at least 20% of annual premium (for individual) or 30% of premium for family
- Has not accepted a financial incentive to decline subsidized health insurance
- Provisions can be waived if employer’s contribution is applied to offset individual’s premium assistance and for individual’s premium payment
- Premium assistance limited to Medicaid Managed Care Organizations if they meet specified enrollment requirements (Section 93 of HD 4573)
- Assessments and surcharges to hospitals, insurers, and retained income tax for individuals who fail to obtain health insurance serve as sources for funding for Safety Net Care
- Division of Health Care Finance and Policy in consultation with Exchange determines liability to Safety Net Care Expendable Trust Fund to assist in funding.
- Transition Assistance Provider Board assists acute hospitals and community health centers in moving to Safety Net Care (section 1 of HD 4573)
TRANSPARENCY–NEW SECTION 6B OF CHAPTER 118G
(Section 28 of HD 4673)
- Division of Health Care Finance and Policy (DHCFP) has authority to collect data needed by consumers to make informed decisions about their medical care
- Health care providers, pharmacies, payers and insurers required to submit data to DHCFP
- Data includes claims and payments by facility, clinician or physician, group practices for OB services, office visits, surgical procedures, diagnostic test, therapeutic procedures, ER visits, hospital ambulatory and outpatient visits and other health services
- Data submitted does not become public; can only be used by DHCFP
- Division analyzes data and provides analysis to Exchange for publication on its website
- Failure to provide data can result in civil fines.
Key elements of the 1115 Waiver agreement between CMS and the Commonwealth
- Establishes a Safety Net Care Pool comprised of the following elements
- Commonwealth’s disproportionate share hospital (DSH) allotment ($574.5M)
- Payments made to the Boston Public Health Commission and the Cambridge Public Health Commission ($385M)
- Includes $100M of new money annually in each of SFY06, SFY07 and SFY08
- Makes release of the $385 million (former Boston Public Health Commission and Cambridge Public Health Commission payments) in SFY 2007 and SFY2008 dependent on the following conditions:
- Termination of Inter-Government Transfer (IGT) financing arrangement by July 1, 2006
- Demonstration by the Commonwealth of legitimate state match for all Federal dollars
- Creation and implementation of a program funded from the Safety Net Care Pool with the objective of reducing the rate of uninsurance
- Development of health insurance products to achieve this objective is the preferred programmatic option
- Proposal must detail the projected rates of uninsurance at the end of State Fiscal Year 2007 and State Fiscal 2008
- Requires CMS approval for any payments and payment methodologies utilizing Safety Net Care Pool funding
- Submission of a specific proposal to CMS should be well in advance of July 1, 2006 start date
- Subjects all Safety Net Care Pool payments to the Commonwealth’s waiver budget neutrality calculation
OTHER IMPORTANT PROVISIONS:
- Cities and Towns (local option)
- Section 6 authorizes cities and towns to form local group insurance commission
- Section 32 removes municipal employee health plans benefit design and cost sharing provisions from collective bargaining
- Mandates that employers offer same health insurance premium contribution dollar amounts to all employees
- Carriers can sell health insurance to employers who cover all full time employees
- Eliminates requirement that HMOs must offer contract with MassHealth in order to contract with State Group Insurance Commission.
