Massachusetts redefines "affordable"
Insurers slice rates on health premiums
By Jeffrey Krasner
The Boston Globe
March 4, 2007
Governor Deval Patrick yesterday unveiled significantly lower prices for the health insurance plans that uninsured residents will be required to buy starting July 1.
The annual deductible for the basic plan would be steep: $2,000 for an individual and $4,000 for a family.
Performing a calculation… shows an average monthly premium for residents of Eastern Massachusetts of $305. That indicates a decrease of nearly 20 percent in premiums from the earlier bids.
But each plan offers a range of prices based on age. Plans for young adults with more limited coverage are much less expensive. Residents older than 56 will pay more for coverage. The highest-priced plan for those in Eastern Massachusetts, for people ages 56 to 64 with prescription coverage, is from Blue Cross Blue Shield and has a proposed monthly premium of $504.69.
James Roosevelt Jr., the chief executive of Tufts Health Plan, said… (that) Tufts was able to lower prices in part by limiting its hospital network to those that could provide lower-cost, high-quality care. “For example, for cardiac care, we have Mount Auburn Hospital in Cambridge rather than Massachusetts General Hospital,” Roosevelt said.
http://www.boston.com/business/globe/articles/2007/03/04/insurers_slice_rates_on_health_premiums/?page=full
And…
High deductibles a healthcare worry
By Alice Dembner
The Boston Globe
March 5, 2007
In its attempt to make health insurance premiums affordable, a state board is giving the go-ahead to plans with high deductibles, but that is causing concern that many newly insured people may avoid getting treated when they’re sick or may run up onerous debts to pay their medical bills.
Board officials have said a high deductible is necessary to keep the monthly premiums as low as possible and potentially entice more people to comply with the state mandate to obtain health insurance.
But, research shows high deductibles deter people from getting needed treatment, including preventive care, and can plunge those without savings into debt.
“The state is going to have to make some difficult trade-offs between comprehensiveness of benefits and affordability of coverage, at least in the short-run,” said Nancy Turnbull, president of the Blue Cross Blue Shield of Massachusetts Foundation, which helped shape the universal coverage law. “High deductibles are a blunt and crude way to make coverage affordable. In the future, I hope we can find other ways.”
The new minimal plans are targeted at 160,000 to 200,000 Massachusetts residents without insurance who earn more than $29,400 a year.
John McDonough, executive director of the advocacy group Health Care For All, worries that the board’s proposal could undermine the goal of universal insurance because people “in marginal circumstances” will be “coerced into paying premiums for a policy they won’t be able to use.”
One board member who supports a higher deductible to reduce the premium nonetheless acknowledges it is not ideal.
“It’s not the policy that optimizes health,” said Jonathan Gruber, an economist at the Massachusetts Institute of Technology who has studied the impact of deductibles. “But, we can’t insist everyone who has no insurance get the policy that optimizes their health. They’re going to revolt.”
“The main thing is no one should be bankrupted by medical costs in Massachusetts,” he added. “Let’s get them into the system and get them real insurance, and then maybe they’ll be interested in buying something better.”
Comment:
By Don McCanne, MD
At an average premium of $305 per month, plus a $2,000 deductible, a person earning $29,400 per year must pay $5,660 before receiving help with medical bills. That leaves less than $2,000 per month to live on. That’s affordable? And don’t even think about receiving care at Massachusetts General Hospital.
The contortions that the policy community goes through to avoid endorsing single payer reform could not be better exemplified than by the comments of Jonathan Gruber, a highly respected MIT economist: “Let’s get them into the system… and then maybe they’ll be interested in buying something better.”
Sure, Professor Gruber.