Massachusetts Guidelines For Subsidized Health Plans Intended To Drive Down Costs

Ruzanna Harutyunyan's picture

The Massachusetts Health Insurance Connector Authority Board on Saturday approved guidelines for contracts with managed care companies that include incentives for cutting costs and patient-protection provisions, the Boston Globe reports. The guidelines will apply to state-subsidized Commonwealth Care health plans, which cover 162,000 residents whose incomes are too high to qualify for Medicaid. The contracts will be sent out for bids in January 2009 and take effect on July 1.

Under the guidelines, insurers will be limited to a 2% increase over what was paid to carriers this fiscal year, compared with 8% to 9% permitted in the private sector. Companies that bid lower than the state average will receive more customers, while the lowest bidders will automatically be able to enroll people who drop coverage, wait more than three months to re-enroll and do not select a plan when they begin coverage again. The automatic assignment will apply only to the lowest-income Commonwealth Care beneficiaries -- about 84,600 people who receive fully subsidized care. The new guidelines prohibit switching beneficiaries to a less-costly plan if that plan does not include the beneficiary's regular physician. Beneficiaries with serious, chronic illnesses also would be protected from automatic enrollment.

In addition, companies that improve the rate of comprehensive annual physicals among beneficiaries by at least five percentage points would receive incentive payments of $2 per month for each patient who receives a physical, under the guidelines. A $1 per patient monthly incentive would be available to companies that report on a quarterly basis how their members are using emergency departments (Lazar, Boston Globe, 12/20).


Student Health Care

In related news, the state Division of Health Care Finance and Policy is reviewing state regulations that require college students to have health insurance but allow insurers to cap coverage at amounts that students could surpass if seriously ill, the Globe reports. Most of the 77,800 state residents covered by the student health program have plans that limit payments to $50,000 annually per injury or illness. That limit can easily be exceeded by cancer treatments or hospitalization after a serious injury, the Globe reports.

Sarah Iselin, commissioner of the division, said that the agency is conducting the review because of concerns that the 20-year-old state regulations have not kept pace with rising health care costs and have been inconsistent with the state's health insurance law. Iselin said the agency is considering whether to mandate more generous benefits. She said the agency probably would start requiring schools to track the number of students enrolled in the plans who surpass the coverage limit, as well as to submit health plans for review before the start of each school year. Plans currently are submitted in November, three months after the school year begins (Lazar, Boston Globe, 12/21).

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