Mass. Would Junk Quality, Affordability Promises of Health Insurance Mandate Draft Regulations Exempt High Deductible Plans From Rules On Consumer Cost,

Preventive Care, Drug Coverage



    SANTA MONICA, Calif., March 20 /PRNewswire-USNewswire/ -- Draft
 regulations issued today to exempt high deductible health plans from
 minimum coverage requirements would gut the quality and affordability
 promises of Massachusetts' health insurance mandate. Under the regulations,
 the purchase of high deductible health plans (HDHPs) would satisfy the
 individual mandate without meeting minimum creditable coverage (MCC) rules
 that limit consumer cost, provide coverage of preventive care and require
 inclusion of prescription drugs.
     "We can only imagine that the Board is considering an HDHP exemption in
 response to criticism that health plans recently approved by the Connector
 are still unaffordable for many," wrote Carmen Balber, consumer advocate
 with the nonprofit, nonpartisan Foundation for Taxpayer and Consumer Rights
 (FTCR), in a letter to the board implementing the Massachusetts law.
     "Affordability should be achieved by regulating the insurance industry,
 not by encouraging insurers to cut back on benefits when patients are
 required to purchase insurance. HDHPs require patients to pay more out of
 pocket before coverage kicks in, defeating the purpose of minimum coverage
 and the individual mandate," the letter continued.
     Research compiled by the RAND Corporation has found that sicker and
 poorer patients are those who suffer most under so-called "consumer driven"
 high deductible plans. Such plans pose greater financial risk to sicker and
 poorer patients as well as creating big barriers to entry in the health
 care system, delaying treatment to the point where it becomes less
 effective and more costly.
     "An HDHP exemption to minimum coverage rules is a tacit admission that
 these plans cannot be made affordable without regulating private insurers,"
 said Balber.
     High deductible plans mean patients who are now insured with better
 coverage are likely to become underinsured in the future, wrote FTCR, and
 small employers may also gravitate to such low benefit policies. This could
 create even more serious problems for Massachusetts by diluting insurance
 risk pools and setting up adverse selection that would prohibit older and
 sicker patients from finding affordable coverage in the future.
     Under the draft regulations, HDHPs would be allowed to ignore
 deductible, drug, preventive care and other MCC rules, meaning they could:
     -- Raise deductibles as high as new out-of-pocket maximums of $5,500 per
        individual, and $11,000 per family
     -- Require patients to meet the full deductible before any benefits are
        covered
     -- Set annual or per benefit maximums
     -- Exclude drug coverage
     "The goal of universal health coverage is incompatible with high
 deductible health plans that force patients to bear big burdens and
 discourage preventative medicine," concluded the letter. "Creating this
 exception to MCC requirements will make minimum coverage meaningless and
 puts the integrity of the entire health care system at risk."
     The regulations issued today would also allow insurers to erode
 benefits in plans that meet minimum coverage requirements by imposing a
 lifetime cap on benefit payments.
     READ THE LETTER:
 
     March 20, 2007
 
     Board of Directors, Executive Director
     Commonwealth Health Insurance Connector Authority
     via e-mail
 
     Re: Minimum Creditable Coverage
 
     Dear Connector Board Members and Executive Director Kingsdale:
     Draft regulations to allow the purchase of high deductible health plans
 (HDHPs) to satisfy mandatory coverage requirements without meeting minimum
 creditable coverage (MCC) standards would gut the quality and affordability
 promises of the state's health insurance mandate.
     To date, the Connector's discussion of minimum creditable coverage has
 centered around the cost and array of benefits that will qualify as minimum
 coverage under the law.
     The Connector Board explicitly acknowledged the need for a minimum
 definition of insurance when it approved health plans with annual out of
 pocket maximums for patients, no annual or per-sickness benefit maximums,
 preventive care coverage prior to the deductible and prescription drug
 coverage. You have been lauding Massachusetts as the first state with such
 requirements. An HDHP exemption is a loophole the size of an elephant that
 would allow insurers to escape those protections entirely.
     A classic race to the bottom will ensue. The Massachusetts health
 insurance market will be flooded with low-benefit plans that do not
 adequately cover patients' health needs. If one plan is exempted, you may
 as well eliminate minimum coverage standards altogether.
     HDHPs would be allowed to ignore deductible, drug, preventive care and
 other MCC rules, meaning they could:
     -- Raise deductibles as high as new out-of-pocket maximums of $5,500 per
        individual, and $11,000 per family
     -- Require patients to meet the full deductible before any benefits are
        covered
     -- Set annual or per benefit maximums
     -- Exclude drug coverage
     We can only imagine that the Board is considering an HDHP exemption in
 response to criticism that health plans recently approved by the Connector
 are still unaffordable for many. For example: A 56-year-old individual
 living in Boston and earning $30,000 a year could end up paying 30% of her
 income on health costs if she bought the cheapest Connector-approved policy
 from Neighborhood Health Plan.
     Affordability should be achieved by regulating the insurance industry,
 not by encouraging insurers to cut back on benefits when patients are
 required to purchase insurance. HDHPs require patients to pay more out of
 pocket before coverage kicks in, defeating the purpose of minimum coverage
 and the individual mandate.
     Research compiled by the RAND Corporation has found that sicker and
 poorer patients are those who suffer most under so-called "consumer driven"
 high deductible plans, the very patients Massachusetts needs to cover. Such
 plans pose greater financial risk to sicker and poorer patients as well as
 creating big barriers to entry in the health care system, delaying
 treatment to the point where it becomes less effective and more costly.
     The danger of allowing such high deductible plans to qualify as minimum
 creditable coverage also means that patients who are now insured with
 better plans are likely to become underinsured in the future. Small
 employers may also gravitate to such low benefit policies. This could
 create even more serious problems for Massachusetts, with insurance risk
 pools diluted and adverse selection prohibiting older and sicker patients
 from finding affordable coverage in the future.
     The goal of universal health coverage is incompatible with high
 deductible health plans that force patients to bear big burdens and
 discourage preventive medicine. Universal coverage is about creating a big
 risk pool that spreads risk over the entire population. High deductible
 plans and medical savings accounts dilute risk pools and divide the sicker
 from the healthier, the poor patients from the wealthier, the younger from
 the older.
     Creating this exception to MCC requirements will make minimum coverage
 meaningless and puts the integrity of the entire health care system at
 risk.
     Sincerely,
 
     Carmen Balber
     Foundation for Taxpayer and Consumer Rights
     (310) 392-0522 ext. 324
 
 

SOURCE Foundation for Taxpayer and Consumer Rights

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