On June 21, Massachusetts Governor Mitt Romney (R) unveiled a health care reform proposal that seeks to provide access to health insurance coverage to the 460,000 uninsured in the state. The reform proposal focuses on market solutions and personal responsibility to provide affordable comprehensive care to those who are currently uninsured.
The proposal would provide health insurance coverage through three avenues: Medicaid, Commonwealth Care, and Safety Net Care. Of the total uninsured, 106,000 are estimated to be eligible for Medicaid but are not currently enrolled. Efforts will continue to enroll those currently eligible.
Commonwealth Care is targeted to those individuals who have incomes greater than 300 percent of the federal poverty level (FPL) and will permit private health insurers to offer less expensive products to small businesses and individuals. It relies on an “Insurance Exchange” where individuals, small businesses, and sole proprietors can purchase insurance from various participating insurance carriers. It presupposes a combination of the non-group and small-group markets. The insurance products envisioned would be comprehensive, yet would be less expensive than the standard small-group market product. Savings would be achieved by limiting the provider network, increasing the deductibles and co-payments, and allowing certain mandated benefits to be excluded if approved by a governing board. The proposal also permits premiums to be tax-deductible for working individuals, eliminates minimum participation requirements, allows multiple part-time employers to contribute to an individual’s premium, and allows for insurance portability from job to job.
The Safety Net Care program is targeted to those who earn between 100 and 300 percent of FPL and who do not qualify for Medicaid, yet cannot afford Commonwealth Care. Safety Net Care would use the same insurance product design as Commonwealth Care but would have lower co-payments and no deductibles. In addition, premiums would be set according to a sliding scale based on income. A reinsurance fund would also be used during the initial roll-out of this program to ensure that no carrier is faced with an inordinate number of high-cost enrollees. This program requires a federal waiver.
The proposal, through Medicaid, Safety Net Care, and Commonwealth Care, envisions that all residents will have access to affordable health insurance. As such, it also requires that each individual in Massachusetts retain a minimum level of insurance or proof of financial means to self-pay. For those who do not comply, there will be a loss of their personal tax exemption and all or a portion of their tax refund will be held in a state personal health care expenditure account. Any person without coverage who uses medical services will be required to self-pay; if unable to pay, funds in the expenditure account will be used and, if the account is depleted, a wage withholding plan will be established.
