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Universal plan can cost under $300, insurers say

Monthly price is closer to goal

Many state residents will probably be able to buy basic health insurance for less than $300 a month to meet the new state mandate that everyone obtain coverage, insurers and observers said last week.

Although it might still be too expensive for some people, that would bring the price closer to what the Legislature envisioned when it passed the universal health insurance law last April.

The state's largest health insurer, Blue Cross Blue Shield, said that with more flexibility from the state, it could offer slimmer coverage for an average of $210 a month -- near the price originally suggested by former governor Mitt Romney.

"If it's buy or die, they could buy at $210 or $220," said Allen Maltz, chief financial officer for Blue Cross. "It would be a comprehensive plan, covering hospital, office visits, prescription drugs. It wouldn't eliminate categories of coverage."

That plan, however, would not satisfy requirements proposed by the state board overseeing the law's implementation because of the plan's high deductible and out-of-pocket limits. Tufts Health Plan also said last week that it could offer a similarly priced plan, but had not worked out the details.

The Commonwealth Health Insurance Connector board is poised to reconsider its requirements this week as it struggles to balance adequate coverage and reasonable prices, a decision observers say could make or break public support for the law. The board is seeking a premium price that is affordable for the nearly 200,000 uninsured Massachusetts residents who do not qualify for state subsidies and will face penalties if they don't buy insurance by July 1.

"There is no decision that will leave everyone satisfied," said John McDonough, executive director of the advocacy group Health Care for All.

Plans with inexpensive premiums typically offer scant coverage or require consumers to pay a lot as they use health services. The board does not want to promote underinsurance or put consumers at risk of racking up large medical debts. If the board mandates extensive coverage, however, premiums would be higher and thousands who have less-extensive plans would have to buy more coverage.

"It's a balancing act, but it's very doable," said Celia Wcislo, a member of the board and assistant division director of Labor Union 1199 SEIU. "I believe that the insurers can come in under $300 with real coverage."

Whatever the eventual price, the monthly bill could be much less for many residents, reduced by an employer's contribution or by a provision of the law that enables many to get a tax break of 20 to 30 percent. But for people in their 50s and 60s, the monthly bill would be more.

There's little evidence on what price would be affordable for the people affected by the minimum standards -- those earning more than 300 percent of the federal poverty level or $29,400 for an individual.

A telephone poll conducted last fall by Robert Blendon, a Harvard health policy professor, found that 78 percent of single adults with annual incomes of $35,000 consider a $200 premium reasonable, but 51 percent said $300 was affordable. Less than 25 percent considered $400 reasonable.

Blue Cross's proposed $210 plan harkens back to the $200 plan proposed by Romney in 2005 after he broached the idea of universal coverage. The insurer helped Romney assemble that plan, which was never fully fleshed out. Romney said he wanted to leave the details to the insurers, but based his plan on restricting access to doctors and teaching hospitals, increasing copayments, and restricting benefits.

Critics pounced on Romney's suggestions to limit coverage of medicines to two prescriptions a month and to reduce or eliminate coverage for in vitro fertilization, chiropractic care, and home healthcare.

As the universal coverage bill made its way through the Legislature, lawmakers quickly rejected the limits on prescriptions. Under a barrage of lobbying from the providers of in vitro fertilization, lawmakers backed away from cuts in that arena, especially when calculations showed the savings weren't huge, according to Representative Patricia Walrath, cochair woman of the Legislature's Committee on Health Care Financing. Other proposed benefit cuts were dismissed as unworkable for health or economic reasons.

In the end, the House suggested that $320 was a more reasonable premium for a fairly comprehensive yet basic plan that wouldn't hit patients with deductibles above $1,000 or copayments so high that people would avoid care or run up debt. House staff compiled the estimate from different plans proposed by insurers, but never disclosed the components other than limiting choice of doctors and hospitals. "We felt that $200 was not going to be a real insurance policy," Walrath said.

There were heated discussions with the Senate about copays and deductibles and some in the Senate wanted even broader coverage, according to Senator Richard Moore, Walrath's cochair man. Most agreed that $320 might buy decent coverage, but lawmakers eventually passed the buck to the connector.

The connector's policy committee decided in November that the minimum plans should provide comprehensive coverage, including prescription drugs, and hired an actuary to model a minimal plan. It came back with a $260 average premium and a fairly high deductible, which applied to hospital benefits.

But when the board sought bids from insurers, many came in substantially higher. A summary prepared by board staff showed monthly premiums ranging from $250 for a 28-year-old to $500 for a 56-year-old, which one board member averaged to about $380.

Observers suggest that these initial bids were bargaining positions designed not to undercut plans the insurers currently sell. Insurers also have little information on who is likely to buy these plans, including how old and how sick they are likely to be, so insurers may have built in some cushion.

Blue Cross, however, offered the state a plan for an average of $280 a month that met the board's requirements, according to Maltz, the insurer's chief financial officer. He wouldn't reveal details of the plan.

The connector board, shocked at the high average, decided two weeks ago to seek lower bids from all the insurers, and said it wanted them to meet new requirements: no deductibles higher than $2,000 for an individual and out-of-pocket spending capped at $5,000 per individual.

Before the deductible kicks in, the plans must cover generic drugs and three medical visits per year for an individual.

Blue Cross's largest competitors say they expect to have bids in the $300 range.

All three insurers, however, agreed with Maltz that the board's directives "would push the cost up, not down."

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

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