State Prepping For Huge Shifts In Subsidized Insurance Populations
More than 150,000 people enrolled in the state's subsidized health insurance program Commonwealth Care will have three months to re-subscribe for benefits under the federal Affordable Care Act, heralding an outreach push planned by the Patrick administration to alert affected residents.
Administration and Finance Secretary Glen Shor and Health and Human Services Secretary John Polanowicz said the state has experience reaching out to the affected population, and will rely on a system of calling, advertising and a network of community organizations known as "Navigators" to help with the reenrollment push.
"It's one of the things the administration and, I think, all the advocates are doing everything we can to not have any backsliding against that nation-leading coverage," Polanowicz told reporters, referring to the 98 percent coverage rate in Massachusetts since the implementation of health reform in 2006.
Open enrollment for ACA-compliant plans offered through the Health Connector for individuals earning up to 400 percent of the poverty level, or about $46,000 a year, begins Oct. 1. Prior to the ACA, the state only offered subsidies up to 300 percent of the poverty level.
The administration's top health care officials met with members of the media on Wednesday to discuss the Jan. 1, 2014 implementation date for the Affordable Care Act, and benefits Massachusetts stands to realize from the controversial health care law.
As administration officials were preparing for the briefing, Texas Republican Sen. Ted Cruz led a 15-hour filibuster on the floor of the Senate Tuesday night as conservative GOP lawmakers in Congress threatened to take the federal government to the brink of a shutdown unless the Affordable Care Act is defunded.
"I think it would be very problematic if the entire thing was defunded and I think, frankly, the discussion about defunding it at a high level forgets about all the cornerstone investments that have already been made and programs implemented that would have to go away," Polanowicz said.
The secretary cited the threat that children up to age 26 would no longer be covered on their parents' insurance, small providers would not be able to afford the development of electronic medical records, and seniors would see the average $667 decrease in prescription drug costs from the ACA disappear.
In addition to the 150,000 subscribers who will re-enroll in a subsidized plan through the Health Connector, Shor said approximately 100,000 enrollees will be automatically shifted from Commonwealth Care into the state's Medicaid program - MassHealth - due to expanded eligibility up to 133 percent of the federal poverty level.
Another 45,000 residents currently lacking subsidized health coverage are expected to become eligible for MassHealth.
Despite the expansion of Medicaid and subsidized health plans under the ACA, Shor said the state is expected to reduce its share of health care spending subsidies in fiscal 2014 by $205 million, with greater federal reimbursements coming back to the state.
That savings total is expected to climb in 2015 through 2019 as the federal reimbursement rate for subsidized plans - currently at 50 percent - increases to 75 percent in 2014 and up to 90 percent by 2019. Overall, the state is expecting to receive $2 billion in additional federal funding through 2019 under the ACA, and $500 million annually after that.
Shor said concerns that the Affordable Care Act would significantly drive up premium costs for small businesses and individuals never materialized. Base rates used to calculate overall premiums will grow 1.9 percent on average starting in January, according to the rates now on file with the Division of Insurance.
"For small business and individuals, I think there was a fear that the ACA would cause massive disruption across our merged small employer and individual market by, for starters, imposing heavy new costs on top of typical health insurance cost trends…," Shor said. "The reality is there certainly is no massive across the board increase."
With base rate increases for January in line with recent quarters, Shor said it's unlikely that the ACA will have a negative impact on the state's ability to make its cost-growth benchmarks set by last year's cost containment bill. The Health Policy Commission plans a two-day cost trends hearing on Oct. 1 and Oct. 2 to hear from stakeholders.
Though the federal health reform law was based on the Massachusetts model, Gov. Deval Patrick recently requested a waiver from rules that would limit from nine to four the number of factors insurers can use to calculate premiums, including age, geography, family size and smoking status.
Though Health and Human Services Secretary Kathleen Sebelius has yet to respond, Patrick was previously denied his verbal request for a full waiver, instead given the only partial waiver in the country that will allow Massachusetts to phase in the rating changes over three years.
Acknowledging concerns in the business community that the new rating process will increase costs for employers, Shor and Polanowicz said 53 percent of subscribers in the small group and individual market will see increases, while 47 percent will see decreases.
Those that will pay increased premiums include 377,000 small group subscribers and 14,000 individual subscribers, while 256,000 small group and 69,000 individual subscribers will pay less. The bulk of the spikes or decreases will be under 10 percent spread over three years, according to Shor, while some will see larger fluctuations.
The Obama administration's decision to delay the ACA's employer mandate until 2015 will also leave Massachusetts without an employer health insurance mandate for the first time since 2006, but officials said they are not worried about a decrease in employer sponsored health coverage in Massachusetts.
"We do not expect small employers in turn to drop coverage that they currently provide because fundamentally employers provide coverage in Massachusetts because it's the right thing to do, it's good business, it helps them recruit the employees they need to succeed," Shor said. The ACA also makes tax credits available for businesses that provide health coverage to low-income workers, he added.
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