State tweaks health insurance rules

Base requirements for policy coverage will be tightened

Starting Jan. 1, residents who do not have health insurance that meets minimum standards set by state regulators could face a hefty tax penalty.

A state board voted unanimously yesterday to proceed with the new requirements, drafted in 2007. But the panel added exemptions for an individual, union, or employer who can show that their plan - while not one authorized by the state - has comparable benefits.

In general, to meet the test, a plan must offer coverage for prescription drugs, preventive and primary care, hospitalization, mental health and substance abuse services, and emergency services.

Plans for an expanded list of required minimum benefits was put on hold. The Commonwealth Health Insurance Connector Authority board voted to delay until Jan. 1, 2010 implementation of rules that will mandate radiation and chemotherapy; maternity and newborn care; and diagnostic imaging and screening tests. The delay is to give employers more time to overhaul their policies.

Leslie A. Kirwan, the board's chair and state secretary of Administration and Finance, said that regulators' goal is to make sure that nearly everyone in Massachusetts not only has health insurance, but decent coverage.

"Our intent is to help, not hurt people," she said. "We will continue to track implementation . . . to revisit thorny issues as they arise and to make mid-course corrections where necessary."

All health insurance companies licensed in Massachusetts will be required to notify customers about whether their plans meet state standards. However, the rules put the onus on individuals to make sure their coverage meets the state's minimum standards, because it will be individuals, and not employers, who are assessed the penalty.

Currently, the state's universal healthcare law requires most residents to have insurance or face a tax penalty of up to $912 per year. But the rules do not mandate what the coverage must include.

Regulators said yesterday that the penalty in 2009 would probably be higher than $912.

During the past year, board members have grappled to design minimum standards that give consumers vital insurance coverage to protect them from bankruptcy if they get sick, but are not so sweeping they make the insurance unaffordable.

"We're trying to make sure people have real insurance that means something," board member Celia Wcislo, a vice president of 1199 SEIU Health Care Workers East, said yesterday.

Despite months of public debate, some board members said they are concerned that employers might still not understand how to determine whether their policies comply with the rules, or how to appeal if they do not. The Board's executive director, Jon Kingsdale, said there will be presentations for employers across the state the next several months to sort through those issues, and mailings to insurance carriers and employers will explain the new requirements.

Brian Rosman of Health Care for All, one of the state's largest consumer groups, said he was pleased with the final package.

Kay Lazar can be reached at klazar@globe.com