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State OK's 7 low-cost health plans for uninsured

Penalty for failing to get coverage may be lifted for some

The board overseeing healthcare reform yesterday gave its approval to seven health insurance plans that will offer relatively inexpensive coverage to residents who don't have health insurance through their employers or other sources.

The move sets the stage for implementation of the most contentious feature of Massachusetts' landmark effort to extend health insurance to every resident: a requirement that the uninsured buy insurance or face an escalating series of penalties. Starting July 1, residents without insurance could lose their personal state income tax deduction.

But state officials, who face growing criticism about the plans' affordability, said they would consider exempting some people from the penalties.

"We want to get everybody in the Commonwealth using health insurance, but we also want to be humane and recognize the exceptions," said Jon Kingsdale , executive director of the Commonwealth Connector board.

The state previously introduced free health coverage for low-income residents, and subsidized plans for those earning up to three times the federal poverty level, about $29,000 a year for an individual. The Connector said more than 52,000 residents were enrolled in the subsidized plans as of March 1.

The newest plans, called Commonwealth Choice, are intended to provide low-cost insurance for those who earn too much to qualify for subsidized coverage, between 160,000 and 200,000 residents.

The seven plans include a variety of coverage options, but have three basic designs. "Bronze" level plans have lower monthly premiums, but higher out-of-pocket expenses that include copayments, deductibles, and coinsurance, under which the member shares the cost of a service with the insurance company. On the upper end, "gold" level plans have higher premiums, but fewer out-of-pocket expenses.

There is also a set of low-cost plans for young adults, a group that typically has not purchased health coverage.

The prices also vary greatly with age. Insurance for someone 56 or older can cost twice as much as a plan for a 19-year-old.

"We're in the delightful situation of being able to offer choice," said Kingsdale.

All the plans offer a comprehensive list of benefits, including doctors' visits, hospital stays, outpatient surgery, prescription drugs, physical therapy, and diagnostic tests. "We set a minimum benefit," said Kingsdale. "A lot of plans did better than that."

Still, healthcare advocates remain concerned about the potential effect of large deductibles and other out-of-pocket expenses on low-income families. Before the Connector meeting yesterday, the Greater Boston Interfaith Organization held a rally at the State House to highlight the problem of the "economically vulnerable."

"The bottom line is that many families still won't be able to afford this insurance," said Reverend Hurmon Hamilton of Roxbury Presbyterian Church, president of the interfaith group. "The Commonwealth cannot punish them into indebtedness."

The group wants the Connector board to suspend penalties for those who fail to purchase coverage.

Brian Rosman , research director of Health Care for All, an advocacy group that helped shape the reform law, said coinsurance is a confusing concept to many consumers. Unlike a traditional copayment, where the patient pays a minimal fixed amount for services such as office visits, coinsurance means the patient pays a percentage of the total cost. For many procedures, that can result in significant out-of-pocket expenses.

"Nobody knows the cost of an office visit when they go to the doctor," said Rosman.

Some Connector officials said the effect of the "cost-sharing" provisions in the new plans has been overemphasized. Most plans exempt doctors' visits from the deductible, so members have affordable access to preventive care.

"Don't underestimate the importance of first-dollar coverage for doctors and medications," said Charles Joffe-Halpern , a Connector board member who also heads a group providing healthcare to low-income residents in North Adams. "Historically, uninsured individuals delay seeking care for financial reasons and wind up in emergency rooms. That's what we're trying to avoid here."

The seven approved Commonwealth Choice insurers are: Blue Cross Blue Shield of Massachusetts and Harvard Pilgrim Health Care, the only two that will offer coverage statewide; and ConnectiCare, Fallon Community Health Plan, Health New England, Neighborhood Health Plan, and Tufts Health Plan, which will offer coverage in specific regions.

Jeffrey Krasner can be reached at krasner@globe.com.

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