The Massachusetts Commonwealth Health Insurance Connector Authority on Thursday approved bid specifications for health insurers that aim to reduce cost increases for Commonwealth Care, the state subsidized insurance plan, and consolidate the program, the Boston Globe reports. The program in its first year enrolled nearly 160,000 residents, far more than expected, and officials estimate that costs could reach $619 million this year, $147 million over budget. Officials say costs for the subsidized plans could increase by as much as 14% in 2008 if no changes are made.
The connector board approved bid specifications for insurers to reduce payments to health care providers by 3% to 5%. Patrick Holland, the board's CFO, said, "There's no justification to be paying more than Medicaid rates." The board did not consider reductions to services provided by the plans, but it urged insurers to control spending on beneficiaries with substance abuse problems and chronic conditions through better oversight and follow-up care.
In addition, the board voted to eliminate a program that allows beneficiaries to pay higher monthly premiums in exchange for paying smaller fees when receiving care. The program attracted a disproportionate amount of sick and elderly beneficiaries and cost the state twice as much as a plan with lower premiums. A vote on whether to increase copayments and other out-of-pocket costs for beneficiaries with incomes greater than the federal poverty level was delayed until February 2008 (Dembner, Boston Globe, 12/14).
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