Wednesday, April 11, 2007

About 20 percent of uninsured would be exempted from state law

By Alice Dembner, Globe Staff

About 20 percent of uninsured adults would be exempted from meeting the state's new requirement that everyone have health insurance, under a proposal that will be voted on tomorrow by a state board.

The proposal, from the staff of the board overseeing implementation of the new universal health insurance law, estimates that even the lowest-cost insurance would not be affordable for about 68,000 individuals with low and moderate incomes.

In addition, the staff proposal would expand subsidies for the lowest-income families who qualify for a state-sponsored insurance program called Commonwealth Care.

This would extend free coverage to individuals earning up to about $15,000 a year and families of 4 earning up to $31,000. It would also reduce the cost of insurance by $5 a month for those earning between $15,000 and $20,000 who are eligible for Commonwealth Care.

The increased subsidies would cost the state about $13 million more than the $470 million estimated for the fiscal year that starts July 1.

"The proposal represents a reasonable way to determine generally whether insurance is affordable for most people," wrote Jon Kingsdale, executive director of the Commonwealth Health Insurance Connector in a memo outlining the proposal to board members.

"If we do not find a way to oblige most individuals to participate, healthcare reform will fail to achieve its promise," he wrote. "However, we are walking a tightrope."

The proposal adopts some of the recommendations of a coalition of advocacy, labor and medical groups that had argued that applying the insurance mandate to people who couldn't afford it would undermine public support for the initiative.

But the statff proposal requires Massachusetts residents to pay a higher percentage of their income toward health insurance than that coalition suggested was affordable.

Under the law, all adults must have insurance by July 1 or pay a penalty. The penalty, initially about $200, will be imposed on those who do not have insurance by Dec. 31.

Individuals making about $33,000 a year would be required to comply with the law if they can find an insurance policy that meets state standards and that costs $150 a month or less, about 5.5 percent of their income, according to the staff proposal. The coalition had proposed that the limit be set a 4.5 percent of income and include not only premiums, but some out of pocket expenses.

The proposal also allows individuals to apply for hardship waivers of the law.

Posted by Karen Weintraub at 09:08 AM

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