Massachusetts Rejects Insurer Bids For Subsidized Health Coverage Program

Main Category: Health Insurance / Medical Insurance
Article Date: 04 Mar 2008 - 7:00 PDT

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Massachusetts officials canceled a meeting scheduled for Wednesday at which they were to review contract bids from insurers in the state's subsidized health insurance program and vote on ways to partially offset costs, the Boston Globe reports. Leslie Kirwan, the state's top budget official and chair of the Commonwealth Health Insurance Connector Authority, said, "The bids we received were not satisfactory."

In December 2007, before the bidding process began, Connector officials predicted that premiums for Commonwealth Care could increase by as much as 14% without any changes in coverage and copayments. Three sources close to the bidding process said that initially, some of the four insurers' bids would have raised premiums by more than 14%. According to the Globe, the second bids "were more moderate, but apparently still too high for the state."

Representatives of the insurers have said the companies are losing money under the existing contracts. Several insurers said they hoped to reach a new agreement with the state after their bids were rejected and Wednesday's meeting was canceled. Christine Cassidy, a spokesperson for Fallon Community Health Plan, said, "We'll be looking to [Connector officials] for a little more direction." Connector spokesperson Dick Powers said, "We continue to review the bids and our options."

Gov. Deval Patrick (D) in his fiscal year 2009 state budget proposal included $869 million for the subsidized program, an increase from $618 million this year. More than 170,000 low-income state residents are enrolled in the program, and enrollment is expected to increase to 225,000 by June 2009. Although Commonwealth Care costs are slightly under budget this year, officials are considering ways to keep the program affordable as health care costs and enrollment grow. Among the ideas being considered are a cigarette tax increase and increased copays and premiums for beneficiaries (Dembner, Boston Globe, 2/29).

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