Health insurance requirement might drop drug coverage

A state board decided yesterday to reconsider whether prescription drug coverage should be part of the basic health insurance everyone in the state must have by July 1.

Members of the board, which is overseeing the state's universal health insurance law, agree that medicines are an essential part of any comprehensive coverage, but they are seeking ways to keep insurance premiums affordable. In addition, they are concerned that a prescription drug requirement could force as many as 210,000 people who are already insured to buy more coverage.

Yesterday, the Commonwealth Health Insurance Connector board asked insurance companies to price two new plans, one with drug coverage and one without. The board is expected to review the new bids at its March 8 meeting and decide on March 20 what level of coverage will satisfy the new state mandate.

Some board members suggested imposing a drug requirement, but waiving it for a year or two for people who already have insurance that doesn't include prescription drugs.

"Hopefully, what we're doing is insuring more and more people and not throwing people off," said board chairwoman Leslie Kirwan, in response to those suggestions. "If that means a phased approach, we should consider that."

However, she said she had not made up her mind about which approach to take.

Under the new law, all adults must obtain at least minimal coverage by July 1 or pay a penalty, unless they secure a waiver by proving they can't afford insurance. Individuals earning less than 300 percent of the poverty level, or $29,400 a year, are eligible for a separate, state-subsidized insurance plan.

Insurers' first proposals for basic insurance plans including prescription drug coverage carried an average monthly premium of about $380, according to board staff members. Board members balked at the price and asked for new bids about two weeks ago. But they added proposed requirements for drug coverage that insurers said were impossible to implement quickly and would create problems for 163,000 people whose insurance does not include any drug coverage and 46,000 people with more restrictive drug coverage than the board proposed.

The board revised those suggested requirements again yesterday. The new bids are supposed to provide coverage that includes primary care, emergency services, hospitalization benefits, and mental health service. The plans must not include limits on coverage per sickness, year, or lifetime. Deductibles for in-network care must not exceed $2,000 for an individual, and at least three preventive-care office visits must be provided before the deductible applies.

In addition, out-of-pocket spending for an individual is limited to $5,000, which includes the deductible and copayments of $100 or more, but not necessarily prescription copayments. If prescription drugs are covered by the plan, there must be a separate drug deductible of no more than $250 for an individual.

The new plans, once approved, will be marketed to between 160,000 and 200,000 state residents without insurance who have incomes over $29,400 a year. The board is also reviewing more comprehensive and expensive plans that could also be offered to those individuals, starting May 1.

Before the board decides on drug coverage for the basic plan, board member Dolores Mitchell -- executive director of the Group Insurance Commission, which manages insurance for state employees -- asked for detailed information about "the medical implications of not covering drugs."

One board member was adamant about including prescriptions. "I'm not going to vote for something without drug coverage," said Celia Wcislo, assistant division director of the Service Employees International Union Local 1199, the largest healthcare union on the East Coast .

Louis Malzone -- a board member who is executive director of the Massachusetts Coalition of Taft-Hartley Funds, a group of private health plans jointly managed by unions and management -- said he supported Wcislo's position in principle, but added, "We might have to take a modest step first."

Others -- including Richard Lord, president of Associated Industries of Massachusetts -- were leaning against requiring prescription drug coverage unless the premiums are nearly equal. In the first round of bids, premiums for plans without drug coverage were about 15 percent lower.

Advocates have told the board that they consider any coverage that excludes prescription drugs inadequate.

The state's largest insurers have said they could provide minimal plans for less than $300, including drug coverage. Yesterday, Kirwan said Governor Deval Patrick had asked insurers to try to pare back premiums to help the insurance mandate work. In an earlier round of bidding for subsidized plans, costs dropped 15 percent from the initial bids, according to the board's executive director, Jon Kingsdale.

Premiums from those plans range from $18 to $180 a month, depending on the subsidy and the plan.

Alice Dembner can be reached at dembner@globe.com.