Connector Recommends High Deductible Plans

March 5, 2007

Gov. Deval Patrick announced Saturday that negotiations with insurers have led to a plan under which an average uninsured resident, typically those under 37, could pay $175 a month for insurance. The figure, which applies to an average eastern Massachusetts resident, includes drug coverage. Without drug coverage, the figure falls to $156 a month. But state officials said the plans could be even less expensive if purchased with pre-tax dollars under another provision of the state's new health care law.

Connector staff are recommending that the board give its "seal of approval" Thursday to plans offered by Blue Cross and Blue Shield of Massachusetts, ConnectiCare, Fallon Community Health Plan, Harvard Pilgrim Health Care, Health New England, Neighborhood Health Plan and Tufts Health Plan. The Connector board is scheduled to vote on the proposals Thursday.

While public officials highlighted the lowest cost option, they said insurers will offer a range of policies under the Connector´s Commonwealth Choice program and plan details will vary widely based on age, region and the plan. The board overseeing the state's landmark healthcare law is considering minimal coverage plans with deductibles up to $2,000 before the full benefits of insurance kick in. Saturday, Governor Deval Patrick released the latest plans, which the board is scheduled to vote on this week.

Of the high deductible plans, "The state is going to have to make some difficult trade-offs between comprehensiveness of benefits and affordability of coverage, at least in the short-run," said Nancy Turnbull, president of the Blue Cross Blue Shield of Massachusetts Foundation, which helped shape the universal coverage law. "High deductibles are a blunt and crude way to make coverage affordable. In the future, I hope we can find other ways."

The promotion of plans with premiums of less than $200 a month was a huge departure from results of the first round of talks with insurers, which ended with news that premiums might cost $380 a month.

In Massachusetts, plans with high deductibles are not particularly popular. Slightly more than 120,000 people -- or about 2 percent of insured residents -- now have policies with deductibles over $1,000, according to interviews with major insurers. Approximately 19,000 have deductibles of $2,000 or more.

Highlights of the announcement included:

• The $175.15 per month figure comes from Neighborhood Health Plan, which submitted the lowest bid. Neighborhood Health Plan CEO Deborah Enos said they were able to keep the cost so low due to the organization's "targeted network" of community health centers and offer them across the three regions, with $153 a month for a basic plan in central and western parts of the state.


• Other bids being recommended for approval range from $241.68 a month for the average individual between 35 and 39 from Tufts Health Plan to $288.31 from Harvard Pilgrim Health Care. Blue Cross Blue Shield of Massachusetts also submitted a plan at $275.21 a month.


• Fallon Community Health Plan, Health New England and ConnectiCare do not offer plans in the eastern region, with Health New England and ConnectiCare offering plans in western Massachusetts, at $237.59 and $245.74, respectively, and Fallon offering a $176 plan in central Massachusetts.


• Bids from Megahealth, Midwest, and United were rejected, Kingsdale said, since their premiums were more expensive and their proposals were "far below" other plans in product, design and innovation.

What folks are saying about the development:

John McDonough, executive director of the advocacy group Health Care For All, worries that the board´s proposal could undermine the goal of universal insurance because people, like Coleman, "in marginal circumstances" will be "coerced into paying premiums for a policy they won't be able to use." Others who have spoken out against higher deductibles include the Massachusetts Hospital Association , which is concerned about patients not being able to pay hospital bills, and several lawmakers worried about whether plans with high deductibles constitute good insurance.

Senator Richard Moore while cautioning that a maximum deductible, pinned at $2,000, may be a bit on the "steep side," and the details need to be looked at, Moore said of the plans, "Certainly, the prices that are being cited are well below what we expected."

Celia Wcislo, Connector board member and assistant division director of 1199 SEIU, a healthcare workers union, said of the recommendations, "It´s bare bones coverage," she said, but "that's a lot more security than they had up to this point."

Governor Patrick stated, "Here´s what it basically means: You get a doctor. You get to go for regular physicals. Your family gets to go and your children get to go for regular physicals. You get a certain amount of hospital coverage. You don´t have to worry if you get very sick that your insurance goes away," Patrick said.

Senate president Travaglini said, "The Legislature charged the Connector with the difficult task for negotiating affordable health insurance plans that give uninsured residents a range of innovative choices," Travaglini said. "These bids are evidence that the Connector is making tremendous progress towards implementing health care reform in the Commonwealth."

House Speaker Sal DiMasi said: "From the outset, the House of Representatives knew that no one will benefit from our hard work if there weren´t good options and affordable products. Today´s announcement is a huge step toward making affordable health care a reality for people who really need it."

Jonathan Gruber said: "It´s not the policy that optimizes health," said the Massachusetts Institute of Technology who has studied the impact of deductibles. "But, we can't insist everyone who has no insurance get the policy that optimizes their health. They´re going to revolt."

A final determination on whether to require prescription drug coverage as part of the Commonwealth Choice program is not expected until March 20, when the authority is due to define "minimum creditable coverage" standards.

Please feel free to e-mail any questions, comments or concerns. We will continue to update you as more information becomes available.

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