Senator says health plan rates too high

The state wants to charge low-income residents too much for health insurance coverage, says state Senator Richard T. Moore , a key architect of the healthcare overhaul law.

In a letter to the Commonwealth Health Insurance Connector Authority, which is overseeing implementation of the law, Moore questions whether the proposed rates reflect the intent of the Legislature when it crafted a compromise reform bill in the spring. The law requires all Massachusetts residents to have health insurance starting next year, but the state will subsidize premiums for residents who earn up to three times the federal poverty level, or about $60,000 for a family of four.

``A primary concern of the Legislature was that premiums be affordable to low-income enrollees eligible for" state subsidies, wrote Moore, Democrat of Uxbridge and chairman of the Joint Committee on Health Care Financing. ``Success of the program depends on enrolling people in generally good health. These individuals need to see the plan as providing good value."

Moore said residents who earn less than three times the federal poverty level should pay no more than 5 percent of their income for Commonwealth Care insurance premiums.

The premiums ``ought to range from no more than 1 percent of income at the lower end, to below 5 percent at the top of the range," he wrote.

But the rates proposed by the connector authority's Affordability Committee range from about 1.5 to 6.6 percent of income.

Moore's letter comes in advance of a meeting of the connector authority scheduled for tomorrow at which the board is expected to vote on the proposed rates. There will also be a hearing for public comment, probably in October, before the rates are made final.

John E. McDonough , executive director of Health Care for All, an advocacy group, said he believes the Romney administration will try to raise rates even more for the subsidy program, called Commonwealth Care .

``Right now, the question as we understand it is not are they going to lower the rates from what the Affordability Committee proposed, but are they going to increase them and by how much?" said McDonough.

A spokesman for Tim Murphy , secretary of health and human services and a member of the connector authority, declined to comment on the possibility of a rate increase.

At play in the decision are key principles that will determine whether the subsidized insurance plan will be attractive enough to persuade more low-income residents to purchase health insurance.

If rates are too high, as Moore suggests, some fear healthy low-income residents won't buy coverage. At the same time, if too many residents who require expensive medical care sign on it could drive up healthcare reform costs .

But there also are potential problems if rates are too low. For example, low-income residents who currently pay for health insurance at market rates through their employers might be tempted to instead sign up for subsidized coverage through the state.

``Those are the balancing issues, and they're very tough," said Dolores L. Mitchell , a connector board member who is also executive director of the Group Insurance Commission, which provides health coverage for state employees. ``I'm getting phone calls from advocates. I'm saying this is not an issue that is yet in black and white. I'm hopeful we will find a place where everybody can be comfortable."

Charles Joffe-Halpern , another connector board member, called it a ``fluid situation."

``There's going to be a robust discussion of the pros and cons of different subsidy levels. What the Affordability Committee came up with seems reasonable," he said.

Under the proposed rates, single adults would pay from $10 to $100 a month for health insurance, and couples would pay between $20 and $200 monthly. Children of low-income families will be covered by MassHealth, the state-federal Medicaid program.

Representative Patricia Walrath , Democrat of Stow and House chairwoman of the Joint Committee on Health Care Financing, said she believes administration officials think the proposed premiums are too low. ``I think you'll see some adjustments," she said.

On Monday, the state said the number of uninsured in Massachusetts declined 19 percent during the past two years, leaving 372,000 people without coverage. That could ease the implementation of the healthcare reform law, which is intended to extend coverage to all state residents.

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

(Correction: Because of a reporting error, a story in the Aug. 31 Business section about proposed insurance rates under the state's healthcare reform effort incorrectly said Secretary of Health and Human Services Timothy R. Murphy is a board member of the Commonwealth Health Insurance Connector Authority. He is not a member of the board.)