Why guaranteed lifetime withdrawal benefit election rates continue to rise.
Mar. 20--Leaders of the business community and major health insurers called yesterday for the state to delay for two years, until July 2009, the requirement that all residents have health insurance that meets state standards.
A state board is scheduled to vote on the standards for basic coverage today. Under the state's universal health insurance law, all residents must have insurance by July 1, 2007, or pay a penalty next year, unless they obtain a waiver.
That deadline still stands, but last night the board's staff suggested a shorter delay, of 18 months, for individuals to meet minimum coverage standards.
Both groups agree the delay is needed to allow employers and hundreds of thousands of already insured individuals to upgrade their coverage.
But the business and insurance leaders want more time and fewer restrictions.
"Our comments are intended to . . . avoid unnecessary burdens on individuals that currently have coverage and the employers who provide it to them," the leaders wrote in a letter to the board of the Commonwealth Health Insurance Connector Authority released yesterday evening.
The letter is signed by the leaders of 13 business organizations, including Associated Industries of Massachusetts, the Retailers Association of Massachusetts, and the Greater Boston Chamber of Commerce; and seven insurers or insurance-related groups, including Harvard Pilgrim Health Care and Tufts Health Plan and Neighborhood Health Plan.
To spare thousands of insured residents from having to buy expensive upgrades, the letter also urges the Connector Authority to allow plans with no prescription drug coverage to meet minimum standards. It also asks that plans with dollar caps on lifetime coverage be included.
The authority's staff is recommending that the board require prescription drug coverage, even though that would force more than 86,000 insured people to get more coverage. But the staff agrees that lifetime caps should be allowed, because more than 360,000 state residents have coverage with such caps and it would be too disruptive to say that they all need better insurance. Some plans include caps to keep costs down.
Last night, the board chairwoman acknowledged the concerns raised in the letter and said some delay in implementation was likely. She would not discuss a specific timetable.
"We are very much aware of the need not to overshoot the mark and risk the whole enterprise," said Leslie Kirwan, who is also state secretary of administration and finance.
Governor Deval Patrick has met with business and insurance leaders about the issues in the last week, Kirwan said. "Making sure we do the phase-in in a way that is not disruptive to individuals or businesses is very important," she said.
The minimum standards under consideration by the board are designed to define what is adequate, basic insurance. The board has been trying to decide how much coverage to require without making the price unaffordable.
In addition to deciding the issues of prescription drug coverage and effective date, the board is expected to approve rules requiring that basic plans have deductibles no higher than $2,000 a year for individuals and out-of-pocket expenses no higher than $4,000. Both limits apply only to care provided within the health plans' networks of doctors and hospitals.
The decisions the board makes today are expected to be reviewed in public hearings in May and to be finalized in June.
Explaining the new staff recommendation for an 18-month delay in applying the rules, Jon Kingsdale, the board's executive director, said many employers have already started negotiating with insurers for coverage for the 2008 calendar year, well before tomorrow's board decision. In addition, he said, many employers allow their workers to change plans only in January, so they would not have time to upgrade their insurance under the current schedule.
Neither the staff nor the business leaders are recommending a delay in the mandate that all individuals have some insurance coverage this year. Rather, the delay would allow people to maintain or buy any insurance that meets existing state and federal requirements for 18 months or two years, depending on which timeframe the connector board chooses. After that, they would have to upgrade to insurance that meets the new standards.
"We're going to be the first in the nation to impose new standards on health plans limiting deductibles, out-of-pocket expenses, and drugs," said Richard Lord, president of Associated Industries of Massachusetts and a member of the board of the Connector Authority. "It's important that we give employers and individuals time to be educated about the new requirements and give employers time to redesign their plans and implement this as smoothly as possible. Two years from now appears reasonable to us."
Associated Industries of Massachusetts represents 7,500 employers statewide, including major companies such as Raytheon, General Electric, and Fidelity Investments, as well as many small employers.
All the state's major insurers, except Blue Cross Blue Shield, signed the letter. A spokesman for Blue Cross said executives there had not seen the letter.
James Roosevelt, president of Tufts Health Plan and chairman of the Massachusetts Association of Health Plans, said the delay would give the state "time to learn what works," by allowing people time to make reasoned decisions about coverage.
"We're trying to focus on the goal of the law, to cover the uninsured," he said.
Under the staff plan for a delay, the state would still offer, starting July 1, new basic coverage plans, provided by insurers, that would meet the proposed minimum requirements.
However, they would also sell plans that did not include prescription drug coverage, but those plans would be eliminated in February 2008.