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Mass. panel approves changes to subsidized residents health plan

Email|Print| Text size + By Alice Dembner
Globe Staff / December 14, 2007

Striving to hold down costs to taxpayers, a state panel yesterday approved a range of changes for next year for the rapidly growing subsidized health insurance program. The changes will probably cut payments to doctors and hospitals, reduce choices for patients, and possibly increase how much patients have to pay.

The program is the centerpiece of the state's landmark effort to insure nearly every resident, and there is widespread concern about long-term funding of the initiative because of growing healthcare costs.

In the first year, the program for low-income people has enrolled nearly 160,000, far more than anticipated, and state officials have estimated that the cost could run as high as $619 million for the current fiscal year, $147 million over budget.

State officials yesterday declined to offer predictions of next year's costs, but said they were trying to keep the program affordable for the state and enrollees.

The goal "is to make this great healthcare reform effort sustainable," said Leslie Kirwan, secretary of administration and finance and chairwoman of the Commonwealth Health Insurance Connector Authority, which is overseeing the insurance initiative.

The authority's board agreed yesterday on bid specifications for insurers that would use multiple means to reduce cost increases and consolidate the program. The vote followed one nine days earlier to press insurers to hold the line on premiums for unsubsidized insurance plans sold through the connector.

For the subsidized plan, called Commonwealth Care, the authority's staff has suggested that costs per member could rise as much as 14 percent next year, if there were no changes.

The bid specifications will direct the four insurers that administer Commonwealth Care to cut payments to healthcare providers by 3 to 5 percent.

"There's no justification to be paying more than Medicaid rates," said Patrick Holland, the authority's chief financial officer.

The board did not consider any reductions in the comprehensive range of services covered by the plan, but decided to push insurers to control spending on patients with substance abuse and chronic conditions through better oversight and follow-up care.

In addition, the board voted to eliminate one part of the program that has been the most expensive per member. That program had allowed patients to pay a higher monthly premium in order to incur lower fees each time they sought care. But the option drew the sickest and oldest patients and was twice as expensive for the state as a plan with lower premiums. The approximately 3,500 patients in that plan will have to shift into an option under which they pay more of the cost per visit.

The connector postponed until February a decision on the most controversial step that would save the state money: increasing copayments and other out-of-pocket costs for tens of thousands of patients with an income above the poverty level.

Commonwealth Care members currently pay much less than those with private insurance to visit a doctor, get prescription drugs, or get hospital care.

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

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