Today the Connector Board took its most momentous decision so far, setting premium levels for Commonwealth Care plans for low income uninsured. However, the Board did not produce a unanimous decision as desired by Board Chair and Administration and Finance Secretary Tom Trimarco. The debate exposed fissures in the Board based on differing priorities and views.
Despite being the Friday before Labor Day, the room (larger than ususal) as always, was packed, with several people forced to stand in the back.
The Board discussion of premium levels began with Executive Director Jon Kingsdale’s presentation of his recommendation, developed earlier this week in consultation with members of the Affordability Committee and Secretary Trimarco (see blog entry below for the basics, and Kingsdale’s report for the details). His recommended premiums were higher than the consensus reached by the Affordability Committee presented 2 weeks earlier to the Board.
Chip Joffe-Halperin immediately spoke afterwards, proposing that the levels be reduced just slightly for the middle ranges. Chip advocated for lowering the premium for individuals 150%-200% of poverty (fpl) from $40 to $38, and lowering the premium for those 200%-250% fpl from $70 to $68. Chip argued that a slight decrease in the proposed levels would motivate more people to participate since the numbers are less daunting, mirroring the psychology that retailers using in pricing items below multiples of 10.
Other Board members offered their opinions. Beth Waldman said that lots of MassHealth members pay their premiums every month, even though MassHealth doesn’t make it easy for them to pay. Only 300 people don’t pay each month, out of some 50,000 families with premium obligations. Dolores Mitchell expressed solidarity with a colleague executive director and urged the Board to support the recommendation. Rick Lord, echoed by Tom, mentioned that too generous benefits would encourage struggling small employers to drop coverage.
Lou Malzone raised serious objections to the recommended premium schedule. He said he would have preferred to vote on the Committee’s proposal from two weeks earlier, and that the goal of broad enrollment will not be met by this level of premiums. Talking about his experience with low income families, Lou said they need to think in terms of pennies per week.
Celia Wcislo commented that she has been a hero to some and their worst nightmare to others. She said the recommendation is the best compromise we can all live with, though she expressed doubts on enrollment. She urged the Board to review enrollment after 6 months and reassess premiums in the light of enrollment. She also emphasized that these premiums levels should not necessarily become the enforcement standards defining affordability for the individual mandate. Chip also made this point during the discussion, calling the mandate issue the “elephant in the room.”
Jon Gruber reminded everyone that the program is radical departure from anything tried in other states, and that it would have to be constantly evaluated. He hoped that refinements in IT capacity will allow the Board to create finer income distinctions next year, rather than the 50% of poverty increments being proposed.
Dolores raised the issue of family premiums, saying they were “a tad on the high side,” and higher than GIC charges for family coverage. Under the proposal, 2 adults at the high bracket of the income scale pay $212 monthly, as much as 7.7% of income. MassHealth kids’ premiums are then stacked on top. A married couple with 3 kids would pay $296 monthly, or $3,552 a year, far more than the median family premium paid by those with employer coverage of $2,880.
Beth replied that MassHealth currently adjusts premiums when both the child and adult are enrolled. Though it would be feasible, it would be difficult operationally for MassHealth to take Connector premiums into account. In any case, no adjustments should be made until we had experience, to see if the premiums are a barrier to enrollment. Dolores asked Beth to put the issue on her agenda.
When the time care to vote, Chip reiterated his motion to lower premiums by .01% for the two middle income groups. Jon Gruber questioned why those numbers and not others were targeted, but Celia replied that those two groups had the largest increase from the original proposal. Beth and Rick questioned the need to make changes, and Tom said the success of the program can’t rest on a minor tweaking of the premiums.
The vote on Chip’s proposal was 7-3, with the 3 AG appointees (Chip, Celia and Lou) voting as a bloc. Then the vote was called on the recommended premiums, which passed 9-1, with only Lou voting no.
Deputy Director Rosemary Day presented the terms of the contract being negotiated with Maximus for a customer service call center. After Celia was reassured that the firm provides comprehensive health care to its employees, and that they have extensive language capability, the Board approved the terms.
There also was a proto-discussion of the issue of granting waivers to allow low-income people with access to employer-based coverage into Commonwealth Care plans. Celia raised the issue, but no one (but maybe Jon Gruber) was willing to begin to think about the thorny issue (under the statute, the Connector can allow employed people with access to employer coverage into Commonwealth Care, with the employer's standard per-worker contribution being made to the Connector).