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Elizabeth Cooney is a health reporter for the Worcester Telegram & Gazette.
Boston Globe Health and Science staff:
Karen Weintraub, Deputy Health and Science Editor, and Gideon Gil, Health and Science Editor.
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Tuesday, June 26, 2007
Insurance initiative could face budget crunch
By Alice Dembner, Globe Staff
Some of the companies running new subsidized health insurance plans are asking for more money than the state is willing to pay, a Massachusetts official said today, and could precipitate a budget crunch for the state's health insurance initiative.
Under state contracts, four companies now serve about 80,000 low-income residents in the Commonwealth Care program and are working to enroll at least 60,000 more. The state wants to extend their contracts by six months, until June 30, 2008, but the companies are bargaining for a larger fee, according to Jon Kingsdale, executive director of the Commonwealth Health Insurance Connector, which oversees the program.
State negotiators have offered a 4 percent increase, and agreed to pick up more of the cost if expenses rise significantly, Kingsdale told members of the connector board. That would add about $16 million to the state's cost, money that is already built into the fiscal 2008 budget now being finalized by the Legislature. However, that could leave little room for other possible increases in expenses, if enrollment is higher than expected, for example.
From the companies' point of view, "itís not enough,Ē Kingsdale said, ďand from a budgeting perspective, itís probably too much.Ē
The companies are used to working in a climate where doctors and hospitals demand increases of 5 to 10 percent every year, Kingsdale said. But the state needs to keep cost increases to single digits, he said.