Board OK's rules on health coverage

A state board unanimously approved affordability standards yesterday that will be used to determine who will be excused from the new requirement that everyone buy health insurance.

The vote puts in place the last major building block of the state's landmark health insurance initiative. Next, the state will begin a massive campaign to encourage people to buy insurance or sign up for subsidized state plans.

"Our vote . . . sets the stage for covering virtually everyone with insurance that meets the highest standards in the nation," said Leslie Kirwan, chairwoman of the board of the Commonwealth Health Insurance Connector Authority, which is overseeing the healthcare law.

Officials estimate that 60,000 people will be exempted from getting insurance because it is considered unaffordable.

Even with that exemption, 99 percent of the state's residents are expected to have coverage eventually.

If that goal can be reached, Kirwan said, the state would then try to make insurance affordable for the remaining 1 percent.

She said insurers might be persuaded to reduce their premiums if many healthy adults buy insurance and help spread the cost of healthcare for sicker people.

The board also voted to encourage more employers to facilitate tax breaks for workers by allowing the purchase of health insurance on a pretax basis.

In the meantime, people who cannot afford insurance will continue to be served through state-subsidized charity care at hospitals and health centers.

The new affordability rules will be finalized after public hearings and a June vote. They will be used by the state Department of Revenue to decide, starting next year, who will face financial penalties for failing to buy insurance.

Individuals will also be allowed to apply separately for special hardship waivers if they think their circumstances deserve special exemptions.

The standards establish a sliding scale for this year, based on income and family size, to determine whether premiums are considered affordable. The scale will be revised each year.

Under the plan, individuals who earn more than $50,000 a year, roughly the state's median income, will be considered able to afford insurance and be required to purchase it. Similarly, couples earning more than $80,000 and families earning more than $110,000 will face the requirement.

For people earning less than that, the policy sets out the maximum they would be expected to pay for insurance. If available policies cost more, they would be exempted.

For example, an individual earning between $35,001 and $40,000 a year would be exempted if he couldn't find a policy that costs $200 a month or less. A family earning $70,001 to $90,000 a year would be exempted if faced only with policies costing more than $500 a month.

To ensure that those with low incomes get insurance, the board expanded state-subsidized insurance plans. Those plans are available to people whose employers do not offer them insurance and whose annual income is below 300 percent of the federal poverty level.

For a family of four, that is $61,950; for a single person, that is $30,630.

Under the expansion, people earning up to 150 percent of the poverty level -- $30,975 for a family of four or $15,315 for an individual -- are eligible for free insurance if their employer does not offer coverage.

An estimated 29,000 more people are eligible for this free insurance because of yesterday's vote.

Anyone qualifying for the subsidized program, called Commonwealth Care, is required to participate or will face a penalty.