State agency seeks to cover 30,000 more uninsured
The authority overseeing the state's healthcare law is exploring ways to cover an additional 30,000 uninsured residents, a step that could increase the annual cost of the program by more than $250 million within a few years.
In a study released yesterday, the Commonwealth Health Insurance Connector found that between 30,000 and 40,000 Massachusetts residents are offered health insurance coverage by their employers, but earn less than three times the federal poverty level and cannot afford the premiums. Covering that group is important to the connector's mission of ensuring that every resident has health insurance, said Jon Kingsdale, the authority's executive director.
"We've left 30,000 to 40,000 people without help," Kingsdale said yesterday at a meeting of the connector's board. "We either leave them without help or we deal with the cost. It would be good for healthcare reform to get these people covered."
Under the law, low-income residents who are not offered insurance through their employers can sign up for subsidized plans. The law also gives the connector the authority to extend the program, Commonwealth Care, to low-income residents who are offered an employer-sponsored health plan. Last fall, the Legislature directed the authority to study how many residents might fall into that group and how much it would cost to provide them with coverage.
An annual income at three times the federal poverty level is about $31,000 for an individual and $63,000 for a family of four. A broad range of groups urged the connector yesterday to make such low-income residents eligible for subsidized insurance.
"If the promise of healthcare reform is that we're going to cover everybody who needs health insurance, this is a key group that's left out," said Brian Rosman, research director of Health Care for All, an advocacy group that helped craft the 2006 healthcare law.
Other groups supporting an expansion of coverage include: the Massachusetts Law Reform Institute; the Greater Boston Interfaith Organization; 1199 Service Employees International Union, the large healthcare workers' union; and Health Law Advocates, a consumer aid group.
But connector officials acknowledged that figuring out how to pay for thousands of additional people in subsidized plans would be daunting. Already, it is costing far more than anticipated. This year's budget for the subsidized healthcare program is $472 million, but last month Governor Deval Patrick made a supplemental appropriation of $153 million.
In March, Leslie Kirwan, secretary of administration and finance, said the subsidized healthcare program would cost significantly more than the $869 million proposed by Patrick for fiscal 2009. In an information statement issued to bond rating agencies in April, the state said the bill for fiscal 2009 might be close to $1.1 billion.
Extending coverage presents challenges. Some low-income employees who now purchase employer-subsidized health coverage might be tempted to switch to Commonwealth Care if it offers lower costs or better benefits. That would shift more expenses from employers to the state.
Carey predicted the move would be gradual - about 10 percent of low-income employees on employer plans would opt for Commonwealth Care each year, he said. Even at that rate, however, the additional costs would be significant: an estimated $20 million to $50 million in the first year of eligibility, and $63 million to $283 million by the fourth year.
Another potential problem is that employers could make their insurance coverage less attractive as a way to encourage low-income workers to drop it in favor of subsidized coverage.
"Employers who contribute a lower amount towards health insurance or offer a slimmer benefits package or have an older workforce will be more likely to move their employees to Commonwealth Care," Carey wrote in the report. "The continued financial participation of employers in subsidizing [low-income workers'] health insurance premiums is crucial to the success of health reform," he said.
Jeffrey Krasner can be reached at krasner@globe.com. 