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Commonwealth Health Insurance Connector Authority
Massachusetts’ Health Care Reform and
the Role of the Connector
Academy Health
State Coverage Initiatives Program
April 26, 2007
Outline
In the Beginning…
Key Issues and Decisions
Year One -- Accomplishments and Challenges
How it came to pass
Federal $$ at risk ($1.2 B over three years)
Culture of health reform in Massachusetts• 1988 universal coverage ( “play or pay” plan)• 1996-97 Medicaid expansion• 2002 universal coverage ballot initiative narrowly defeated• Strong likelihood of 2006 universal coverage ballot initiative
Key stakeholders actively engaged• Advocates• Providers• Business leaders• Insurers
State and federal political leaders’ interests aligned
Key Issues and Decisions
Who’s responsible for implementation?• Existing state agency/authority
• New agency/authority
• State-sanctioned private entity
What type of governance structure?• Executive branch department
• Publicly-appointed board of directors
• CEO
Connector Governance Structure
Executive Director
10 Member Board of Directors
Secretary of Administration and Finance (Chair, ex officio)
Commissioner of Insurance (ex officio)
Director of Medicaid (ex officio)
Executive Director of Group Insurance Commission (ex officio)
Three appointed by the Governor
Actuary
Health Economist
Small Business Rep
Three appointed by the Attorney General
Health Care Consumer
Organized Labor
Employee Health Benefits Plan Specialist
Jon KingsdaleExecutive Director
Rosemarie DayDeputy Director & COO
Joan FallonChief Communications
Officer
Bob CareyPlanning &
Development
Jamie KatzGeneral Counsel
Bob NevinsCIO
Paul Wingle Dir of Outreach for
Commonwealth Choice
Melissa BoudreaultDirector of
Commonwealth Care
Ed DeAngeloAsst General
Counsel
Charlene DeLoachAsst General
Counsel
Kaitlyn KenneySenior Policy
AnalystDick PowersPublic Affairs
Niki ConteDir of Outreach for
Commonwealth Care
Kathy HoganOfficer Manager
Naomi TurnerReceptionist
Systems Staff (2)
Patricia BullDir of Commonwealth
Choice
Christine BallasManager of Operations
Shawna HolleboneMgr Comm. Choice
Health Plan
Melinda Burri Mgr. Comm.
Choice Operations
Administrative Assistants (2)
Elba MendezComm. Choice Implementation
Manager
Michael Norton
Manager of MMCO Contracts
Kevin CounihanChief Marketing Officer
(Interim)
TBD
TBD
Lawyer
Program Manager
Brent BjornsenPublic Info. Unit
Michael ChinSenior Policy
Analyst
Karla MedinaPublic Info. Unit
Kerry Connolly Connector Associate
Eric Dahlberg Connector Associate
Connector Associate
Diana McCarleyPublic Info. Unit
Director of Human Resources
Suzi BibilosCommunications
Associate
Patrick HollandCFO
Dom DiVitoDirector of Accounting
Kari MillerFinancial Analyst
Analyst
James WoolmanFinancial Analyst
Stacy LevasseurSenior Accountant
Key Issues and Decisions
Develop subsidized and non-subsidized health insurance programs
• Commonwealth Care Subsidized health insurance program for adults with income
below 300% FPL that do not have access to employer-sponsored insurance, Medicaid or Medicare
• Commonwealth Choice Non-subsidized, “affordable,” commercial health insurance for
individuals (non-group), small groups (50 or fewer employees) and employees above 300% FPL without access to ESI, such as part-timers and contract employees
Commonwealth Care
Statutory requirements:
• Subsidized health insurance program for Massachusetts residents, age 19 or older, who are uninsured and meet eligibility requirements
• Carrier choice limited to four Medicaid Managed Care Organizations (MMCOs)
Commonwealth Care – Key Issues
Establish benefits package and cost-sharing Develop sliding scale premiums for income groups up to
300% FPL• ~$30,000 for an individual
• ~$60,000 for a family of four
Coordinate enrollment and billing with MassHealth (Medicaid) and Maximus (MassHealth vendor)
Negotiate capitation rates with four MMCOs• 15% reduction from initial proposals
Initiate outreach and enrollment campaign• Engage 30+ community groups
• Target “free care” pool users
Commonwealth Choice – Key Issues
Selecting a third-party administrator (i.e., “Sub-Connector”)
“Any willing carrier” or select group of insurers
What types of plans to offer
Who’s our target market
Rating and underwriting rules/issues
The role for brokers
The Connector’s business model
Third-Party Administrator/Sub-Connector
Roles and responsibilities
• Customer service
• Enrollment
• Premium, billing, collection and reconciliation
• Surrogate for health plans’ CSR staff
• Interface with brokers, employers, individuals and carriers
Carrier and Plan Offerings
Model A -- “Any willing carrier” Model B -- Select group of carriers and limited
number of plans========================================== Issues considered
• Administrative capacity Technical and human resources
• Real variations in plan designs BCBS-MA sells 62 different plans in small group market
• Market taker or market maker Promoting new, “affordable” products
• Organizing choice Focus groups expressed preference for limits on plans and
carriers
Target Your Market
Understand your role in the marketplace Limit (unintended) disruption to existing insurance
arrangements Fill in the gaps in coverage options
========================================== The Mass. Connector’s Target Market:
• Non-group
• Small group (Sec. 125)
• Part-timers, contract employees not offered or eligible for group coverage (Sec. 125)
• Young adults (19 – 26) not offered group coverage (possible Sec. 125)
How the Mass. Insurance Market Operates
No medical underwriting
Modified community rating
Relative strict limits on rate disparity• 2:1 rate band compression
Newly merged small group (1 – 50) and non-group markets, effective July 1, 2007
Rating and Underwriting Rules/Issues
Apply the same rules in and out of the Connector
Minimize adverse risk selection
Don’t undermine existing group market
Collaborate with carriers
The Role of Brokers
Understand the influential role of brokers in the marketplace
Recognize that you may be viewed as a threat
Consider using them as a sales force
The Connector’s Business Model
$25 million in seed money
Start up costs can be significant
CommCare and CommChoice supported by 4.5% admin load
CommChoice premiums the same in and out of the Connector
Sub-Connector paid on a per-sub basis
Non-offeredEmployees
SmallBusinesses
SoleProprietors
Individuals
Blue CrossBlue Shield
Fallon
Harvard Pilgrim
The Connector
Commonwealth Choice
Health NewEngland
TuftsHealth Plan
Neighborhood
Year One Complete – Accomplishments…
Maintained and enhanced broad support Over 63,000 previously uninsured now covered by
Commonwealth Care CommChoice plans available through the Connector New products -- many with select provider networks --
now offered in small group and non-group markets Greater choice and more affordable products in non-
group market Minimum Creditable Coverage standards developed Affordability schedule established
…and Challenges
Will health care costs moderate?
Can “crowd out” be avoided?
Will the public accept the reality (and consequences) of the individual mandate?
How will employers respond to new rules (e.g., non-discrimination, Section 125)?
Will Section 125 plans serve as the magic elixir…and will the Connector establish critical mass?
Will products with deductibles, co-insurance and higher point-of-service payments be accepted in the Massachusetts market?