Massachusetts Association of Health Underwriters

All Pushing In the Same Direction - Returning the Connector to Its True Mandate

The Massachusetts Association of Underwriters (MassAHU) supports Health Care Reform and the noble goal of providing health insurance for all citizens of Massachusetts.  Health insurance brokers are an integral part of the health insurance system and have become part of the Commonwealth Connector’s distribution network. However, we are concerned about the Connector’s determination to write group health insurance plans, which we fear may contribute to the unraveling of the entire health care system.

We realize that the Massachusetts Legislature worked diligently to write the enabling legislation, and we all recognize that significant progress has been made. But, the evolving role of the Connector continues to concern us.  Specifically, in July, 2008, the Connector is planning to market Commonwealth Choice plans to Massachusetts employers – even employers who already have existing health insurance policies for their employees through one of the major health plans in Massachusetts including Blue Cross Blue Shield, Tufts and Harvard Pilgrim.  The solicitation of existing policyholders will cause significant disruption to the current distribution model and lead to tremendous instability in the pricing of small group plans.

Unnecessary rising premiums will result in a dangerous backlash by local carriers and small businesses. The ensuing instability will bring negative attention nationwide, undermining the great strides that already have been made. The long-term success of health care reform depends upon all stakeholders pushing in the same direction.

It is imperative that the Connector return to its true mandate of insuring the uninsured, instead of attempting to insure groups that already are covered. The direct intervention of our elected leaders is needed to redirect the Connector’s purpose and to prohibit it from marketing to or accepting business from Massachusetts employers who already have coverage.

Jean Russell, President, MassAHU

All Pushing In the Same Direction

How to Produce Better Health Care Results for the Citizens of Massachusetts

On February 14th, two stories appeared in the Globe.  One was entitled "Health Plans Sold via State Likely to Cost 5% More," and the other was "One in Ten Patients Gets Drug Error." Most people may not see any correlation between these two articles, but it is time for us to connect the dots.  Both articles are indeed related to the same critical issues – the true cost of health care and how to produce better results in terms of cost and quality care for the citizens of Massachusetts.

Health insurance rate increases do not magically go down based on the Connector flexing its muscles with the insurers as one would believe by reading Ms. Dembner’s article, where she states that “the Connector had pressed insurers to curb increases… in the hope that they could set an example for the larger insurance market.”   If the Connector Board believes that is all they need to do to produce lower rates, they do not have enough understanding of the market.

Now, consider the impact of reducing medical errors in our hospitals.  The Globe article focused on results of drug errors in six community hospitals, but Ms. Wen brings in some really important information from a recent study released by the New England Healthcare Institute.  The study estimated that “the average victim of a medication error stays in the hospital at least four extra days.” So, who pays for this?  And what impact does the resulting malpractice liability claim have on the cost of health care?

These are issues we need to be looking at if we want to bring about affordability in health care.  The Connector is not going to bring about affordability.  The carriers are not going to bring about affordability, other than to increase copays here and there, tighten up their drug formularies, or shave a couple of points off their administrative costs.

We need to be looking at the underlying cost drivers.  One of the best outcomes of our state’s health care reform legislation was the creation of the Health Care Cost and Quality Council.  We must continue to devote state resources and priorities to support their work in bringing health care transparency and improved information technology to our residents.  Health care reform will not be successful if decisions are made by people who do not fully understand the complexity and relationship of health insurance to health care.  It is time to redirect our reform efforts away from the Connector and its emphasis on building a state-funded distribution model for health insurance products, and instead turn to a proactive model of health care reform.

The Massachusetts Association of Health Insurance Underwriters (MassAHU) looks forward to continuing the constructive debate on health care reform. Representing the needs of the thousands of employers who purchase health insurance in this state, MassAHU is committed to the continued participation in the Health Care Cost and Quality Council.

Julie Jennings RHU, LIA, CLTC is a health insurance broker and member of the Board of Directors of the Massachusetts Association of Health Underwriters, Inc.

If It’s Not Broken, Then Don’t Fix It

By Jean Russell
President
MassAHU

The Health Care Reform Law was intended to insure the uninsured, not to disrupt those currently insured. However, recent developments seem to indicate that the Commonwealth Connector is planning to provide health insurance options to the small group market. This ultimately will place the Commonwealth Connector in competition with the private sector. By marketing to groups directly, the Commonwealth Connector will create confusion to those groups currently insured. It was never the intent of the Legislature to build another “company” within the current market system. We believe that the Commonwealth Connector is misinterpreting the true intention of the law to compete against the private sector.

Of the companies in Massachusetts who provide health insurance, 93% obtain the services of licensed brokers and consultants when making decisions affecting their employees.  MassAHU has been meeting on a regular basis with representatives of The Commonwealth Connector in developing ways to increase employer sponsored insurance to companies. By working with insurance brokers, the Commonwealth Connector can continue to reach out to those employers who do not currently offer employer subsidized insurance to their employees.

MassAHU will continue to work with the Commonwealth Connector to ensure that the uninsured will have good, affordable health insurance. But, although MassAHU has been very supportive of the goals and objectives of the Health Care Reform law, we feel it is necessary to protect the intent of the law by clearly limiting the Commonwealth Connector’s ability to write contributory plans.  Therefore, MassAHU continues its efforts to clarify the original intent of the law, inserting the 6 month crowd out language in the Commonwealth Connector’s enabling legislature.

DIVISION OF HEALTH CARE FINANCE AND POLICY AND DIVISION OF

The Massachusetts Division of Health Care Finance and Policy (HCFP) and the Division of Unemployment
Assistance (DUA) announced today that to date nearly 44,000 employers have completed their Employer Fair Share/Health Insurance Responsibility Disclosure filing: click here for November 21st Press Release.

In response to: YEAR-END OPEN ENROLLMENT IS NECESSARY FOR INCREASING THE NUMBERS OF INSURED by James Roosevelt, Jr.

Julie Jennings, Chair of MassAHU Legislative Committee responds:

This is a response from the trenches, and I think it is representative of what we are all finding out in the marketplace of health care reform in Massachusetts. The education of the employer-based market has been going on for several months. If people are not signing up, it is not due to lack of knowledge or opportunity. It is because we have not yet begun to address the issue of making health care more affordable.

I, like many of my colleagues who are emloyee benefits brokers and consultants in Massachusetts, have availed myself to employer health insurance clients and their employees to help get the uninsured enrolled - whether it is in the group plan through special open enrollments (which, by the way, all the carriers held for July 1 of this year and which at least one carrier has extended through the end of this year), through inviting representatives in from Commonwealth Care providers and Insurance Partnership programs to help employees apply for subsidies if eligible,through setting up S125 plans and conducting meetings for part-time employees, etc.

Jim, as your broker advisory group what their experiences are. I think it will bear out that the employee benefits brokers in this state have been beating the drum, pounding the pavement, and going above and beyond the scope of their services for no other reason than to help make this reform plan work. But at the end of the day, people are going to make a value decision - Can they afford to have insurance? Can they afford to not have insurance?

Increased deductibles and copays make insurance less expensive, it is true. And some good options have come out of health care reform to that end. I think we also have to tackle a very difficult topic and that is what we require to be included in the insurance policies to meet the definition of adequate coverage, or minimum creditable coverage. The state has not up till now had an appetite for limited mandate plans (although they have allowed some exceptions in the under 26 market), and the MCC requirements I believe are too high to offer people choice and flexibility in buying insurance.

Lastly, we have not yet begun to address the cost of health care and how to rein it in, as one carrier expressed, at least to be in line with the standard inflation rate. I look forward to the work of the Cost and Quality Council to help us along the way.

Thank you for allowing me to put in my two cents. We all have similar goals, but I do not feel that the DOI or governor, the DUA or the Connector, can change the results with your proposed open enrollment extension or more advertising dollars funded by the state. It will take more forward thinking to tackle the uninsured numbers before insurance rates go up to the point that the number of uninsured starts growing.

NAHU: Connector Plans

Health insurance "Connector" proposals (also labeled "Exchanges") are popping up in state legislatures throughout the country. They are based on portions of legislation that Massachusetts enacted during 2006 and, if signed into law, would represent a major shift in the way private health insurance coverage is purchased and delivered. This overview is designed to answer some of the most commonly asked questions about Connectors in order to help you evaluate proposals that may be under discussion in your area.
Connectors are purchasing pools designed to offer consumers greater accessibility to a wider range of tax-advantaged employer health insurance choices than many employees of smaller businesses enjoy today. Connectors intend to operate like the Federal Employee's Health Benefit Plan does today, where many private insurance plans compete for federal workers' business.
All health insurance products sold through a Connector will be individual policies even if they are purchased by an employer in lieu of traditional group insurance coverage. Employers purchasing coverage through a Connector may be required to establish premium-only Section 125 "cafeteria" policies through which the Connector policies would be purchased. Through the Section 125s, someone with multiple jobs could pool money from multiple employers to buy tax-advantaged health insurance.
While the Connector goals of increased consumer choice and accessing federal insurance tax advantages are certainly commendable, NAHU's view of a Connector will depend on the many fine details of the legislation. From a producer's perspective, a Connector can be an innovative private/public partnership to expand health insurance choice, or a taxpayer-subsidized entity directly competing with licensed health insurance producers.

How much do policies cost - visit the Massachusetts Health Connector's webpage to see plan and premium information. http://www.mahealthconnector.org/

More information on different Connector Variations.

At Issue: State Children's Health Insurance Program (SCHIP)

The State Children's Health Insurance Program (SCHIP) began in 1997. Also know as Title XXI, SCHIP was part of the federal Balanced Budget Act of 1997. SCHIP provides a capped amount of funds to states on a matching basis for federal fiscal years (FY) 1008 through 2007 to provide coverage to low-income uninsured children. SCHIP represents the most comprehensive federal effort to ensure health insurance coverage of children since the creation of Medicaid. Since the states have several options as to how they can develop programs to provide coverage to the children in their states, different parts of the country have been more successful than others in reaching out to low-income kids.

SCHIP will expire on September 30, 2007 unless it is reauthorized by Congress. The program enjoys wide bipartisan support but there are differences of opinion regarding the reauthorization. Some members of Congress would like to expand the program. Among the policy changes under consideration include formally allowing adults into the program, changing the program from a block grant to an entitlement and raising the eligibility criteria. 

NAHU's view: SCHIP should be reauthorized and looks forward to working with Congress and the Administration on the reauthorization process.

There’s No Debate on Healthcare: State Representative Eldridge Has It Wrong

Author: Julie Jennings

In a recent overview of candidates for the Fifth Congressional District seat, State Representative Jamie Eldridge proposed that Massachusetts adopt a single-payer healthcare system to help fix our current problems. He touts a government-run system in his effort to attract voters, but he completely ignores the many down sides to this model.

The economic success of a single-payer system is dependent upon the rationing of both access to healthcare and utilization of technology to increase savings. As a result, significant wait-times for technologies, therapies and care become the norm. Any administrative savings we may gain would quickly be eaten up, bureaucratic inefficiencies would replace free-market inefficiencies, and the result would be an over-burdened, under-funded system that is often more cumbersome to navigate than the present system. We deserve better.

My fellow voters should be skeptical of State Representative Jamie Eldridge’s proposal and look to other candidates and their potential solutions to achieve healthcare for all. We should not subject the future of our health to a flawed system.

Individual Subsidized Products

MassAHU favors the expansion of subsidies that encourage productive employment in the workforce. The individual subsidy plan in Massachusetts uses existing government funding (the uncompensated care pool) to help lower-income individuals purchase private coverage through four Managed Care Organizations (MCO’s). In the future, it will be necessary to open up the market to more plans. Plan design should incorporate increased flexibility, allowing for deductibles and more consumer participation.