Is it Scope Creep or True Intent?

| March 5, 2010 | Comments (0)

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In 2006, MA passed landmark healthcare reform legislation to address the “easy” issue with healthcare – insuring the uninsured. Prior to the passage of that law, MA ranked 3rd in the country for the lowest number of uninsured…now we are #1 because we insure almost 98% of our residents when the national average is 83%. All agree – this was a noble cause…but at what cost and importantly, what did we learn and how is it affecting us now? More specifically, merging the non-group and group markets sounded like a good idea – but in reality it has significantly driven up cost for small employers because of increased healthcare spending by the all the newly insured residents with pent up healthcare needs, which has translated into higher premium rate increases.

In response to public pressure on this issue, the government’s answer to this serious challenge is to gather information on the market dynamics (we support) AND “meddle” with the private insurance market to “fix it.”

What’s not working?
Our state government is allowing two things to happen that are highly disruptive to the market and will only exacerbate the cost problem:

(1) the Governor’s directive to cap premium rate increases at 4.8% for all small group employers renewing in April is fiscally irresponsible and

(2) the Connector’s expansion into the small group market through a strategic partnership with SBSB, a private market intermediary of health plans.

The Governor’s directive sets aside prudent actuarial risk management practices to temporarily comfort voter frustration with rising healthcare costs. On the surface, this sounds like a good idea – but it only addresses the symptoms and not the underlying issues. The “unintended effect” of this policy directive will be the probable demise of several MA-based non-profit health plans.

The Connector was established under Chapter 58 of the MA Healthcare Reform Law and it is governed under Chapter 176Q. Its purpose is to:

1. Connect individuals and small businesses with health insurance

2. Reduce the administrative burden of providing health insurance

3. Make it easier to find affordable health insurance

4. Allow more workers to buy insurance with pre-tax dollars

5. Provide portability of insurance to workers who change jobs

Somewhere along the way, the Connector drifted into “Scope Creep” – and away from the intent of the law – to insure the uninsured. Connector officials will tell you they are following the guidelines under Chapter 176Q – but a closer look suggests that is a very liberal interpretation of the law and in our view not the intent of the law as it was constructed.

After a failed attempt to build a viable small group product – the Contributory Plan – in which the Connector spent a considerable amount of taxpayer dollars developing and promoting, the Connector entered into a strategic partnership (acquired) with SBSB taking over its intermediary block of 37,000+ members. Where does the law suggest that the Connector establish itself as a distributor of small group private health insurance products to employers and consumers who are already insured?

As you know by now, the Connector is mailing EVERY small business (less than 50 employees) and aproximately 170,000 businesses in the Commonwealth a letter soliciting them for their business and announcing the launch of their new group health insurance plan – "Business Express." This is disturbing on several levels because it is duplicating expense and misleading the public. There is NO RATE ADVANTAGE to purchase health insurance from the Connector.

Where do we go from here?
The state government is trying to address the cost challenge – and we applaud them for their efforts – and we look forward to the upcoming dialogue at the AG sponsored public hearings. In the meantime, we are asking our members to:

Strengthen our voice by helping us build your professional MassAHU

JOIN your Political Action Committee –  MassAHU PAC and national Political Action Committee - HUPAC

Contact your district representatives and ask them if they understand the private insurance market ramifications of Governor Patrick’s directive on price controls?

Contact your district representatives and ask them if they think its good policy to allow the Connector “scope creep” beyond the intent of the law

Contact the Division of Insurance and ask them if they think its good policy to endorse the Connector’s misleading marketing information?

Contact your district representatives and ask them if they think its good policy to allow the Connector access to other state departments for marketing information (e.g., Department of Revenue) as it continues to solicit business?

MassAHU will continue to address your concerns and advocate for your positions on the issues. We will help the Connector Board understand the VALUE of our independent role in the health care buying equation – and share perspective on how our members provide guidance to employers, business and industry groups as well as consumers all across our state. 

BUT – MassAHU can’t do it alone! Member involvement is critical if MassAHU is to continue to be your VOICE and ADVOCATE on Beacon Hill. Every one of us can make a difference if we care to get involved. Contact your legislators and make a difference in determining whether legislation will pass or fail. Help us help you by getting involved!

Category: Position Statements

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