Massachusetts Health Insurance Connector Approves 10% Premium Increases; State Finance Officer Says Program Is Underfunded

Main Category: Health Insurance / Medical Insurance
Article Date: 24 Mar 2008 - 11:00 PDT

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The Massachusetts Health Insurance Connector Authority on Thursday voted to approve a 10% increase in premiums for insurers participating in Commonwealth Care, less than the 15% plans had originally requested, the Boston Globe reports. Under the new contract, the state would assume more of the financial risk if beneficiaries use more medical services than expected. The board also increased premiums and copayments for some beneficiaries to partially offset increased payments to insurers (Dembner, Boston Globe, 3/21).

Between 35% and 40% of Commonwealth Care beneficiaries with incomes greater than 100% of the federal poverty level will face premium increases (AP/Boston Herald, 3/20). Commonwealth Care premiums paid by beneficiaries will increase by an average of 10%, and after the increases take effect on July 1, the lowest premiums will range from $39 to $116 per month. According to the Globe, copayments for visits to a primary care physician will increase by $5, $10 or $15. Copays for drugs also will increase. In addition, higher-income beneficiaries will contribute higher copays for emergency department care and outpatient surgery. Out-of-pocket expenses for all medical care, excluding medications, will be capped for the first time at $750 or $1,500 depending on an individual's income. A separate cap will be placed on prescription drug spending.

Budget
State Secretary of Administration and Finance Leslie Kirwan on Thursday said that Commonwealth Care will cost "significantly" more than the $869 million included in Gov. Deval Patrick's (D) fiscal year 2009 state budget proposal. During the Connector meeting at which the contract and premium increases were approved, Kirwan said, "We have closed some of the fiscal gap here, but we have not closed most of it." According to Kirwan, higher-than-expected enrollment in the program for the current fiscal year and next year has contributed to the gap.

State officials have been meeting over the past two weeks to discuss ways to reduce costs and raise revenue. Kirwan would not discuss details of the proposals or the size of the budget shortfall but said that without changes, the state does not expect "to be able to live within" the proposed budget (Boston Globe, 3/21).

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