Massachusetts Health Reform A Social Compact for Shared Responsibility State Coverage Initiatives January 26, 2007 Christie L. Hager, J.D., M.P.H. Chief.

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  • Massachusetts Health Reform A Social Compact for Shared Responsibility

    State Coverage InitiativesJanuary 26, 2007

    Christie L. Hager, J.D., M.P.H.Chief Health CounselOffice of Speaker Salvatore F. DiMasi

  • Social Compact

    Voluntary association of individuals

    ... all shall be governed by certain laws for the common good.Source: Preamble, Constitution of the Commonwealth of Massachusetts

  • Health Reform by the NumbersSections of Chapter 58 of the Acts of 2006 .....147

    Chapters of the MGL amended..22

    State entities affected or created....................19

    Residents of the Commonwealth expected to become insured over the next 3 years.......515,000

  • MassHealth Expansion and RestorationsSubsidized Health Insurance Commonwealth Care Health Insurance Program Commonwealth Health Insurance ConnectorUncompensated Care Pool / Health Safety NetMedicaid Provider ReimbursementQuality and Cost-Effectiveness Private Health Insurance Market ReformsEmployer Responsibility Individual MandatePublic Health Health DisparitiesChapter 58 of the Acts of 2006

  • Employer ResponsibilityFair Share ContributionSection 125 cafeteria planFree Rider Surcharge Health Insurance Responsibility DisclosureAnti-discrimination in offer

  • Fair Share Contribution

    Fair and reasonable premium contribution defined and calculated by Division of Health Care Finance and Policy

    Collected by Division of Unemployment Assistance

  • Section 125 Cafeteria Plan1 OfferEffective January 1, 2007

    Section 125 cafeteria plan to be filed with the Connector

    AG enforcement and authority to seek injunctive relief

    Proposed regulations expected February

    1 26 USC 125

  • Free Rider SurchargeIf no 125 offer AND Employee or dependent uses free care 3x in a single yearOR Employer has aggregate of 5 or more uses in a single year:Non-compliance with HIRD requirement OR second successive year of surcharge

  • Individual ResponsibilityEffective July 1, 2007Affordability schedule set by Connector Penalty in tax year 07 - loss of personal exemptionPenalty in tax year 08+ - 50% of monthly affordable premiumReligious and hardship exemptionsAppeals through ConnectorHealth Insurance Responsibility Disclosure

  • Commonwealth Health Insurance Connector Authoritywww.mass.gov/connector

  • Commonwealth Care Health Insurance ProgramSliding-scale subsidies to individuals with incomes below 300% FPL ($29,400 for an individual; $49,800 for a family of 3)

    No premiums for people with incomes below 100% FPL ($9,800 for an individual)

    No deductibles

    Comprehensive benefits

  • Connector DeterminationsAffordable products for >300% FPL (Commonwealth Choice)

    Minimum Creditable Coverage

    Definition of affordability

    Waiver and appeals process

  • Implementation Timeline

  • Individual Mandate(>600% FPL)Affordable Products for non-CCHIP(301-600% FPL)MassHealth ExpansionCommonwealth Care(300% FPL)Coverage Estimates

    Thank you...

    Were very excited back home about the discussion that our work has sparked nationally.

    I will begin and end my presentation with quotes, both relevant to our work in Massachusetts, and heres the first a paraphrase from America, the Book, by the Daily Show a metaphor that those of us who work either in or with the legislature have to admit is most apt:

    If the governor is the head of the state body politic, the legislature is its gastrointestinal tract. Its vast and convoluted inner workings may be mysterious and unpleasant, but in the end they excrete a great deal of material whose successful passage is crucial to our commonwealths survival.

    But, the new law, Chapter 58 as its called, contains many moving parts, all of which are delicately balanced to move forward together, and serve as critical context for why we did what we did, so Ill provide as well-- an oversimplified, Im sure-- overview of most of its provisions, or the WHAT.

    I think youll see that, while we share many of the same problems of limited access and unaffordable premiums, they are all a matter of degree, solutions are difficult to craft, and we can hope to offer you options that may be transferable to your experience here.This is a passage from the Massachusetts Constitution, the nations oldest, since 1780.

    With language adopted from the Mayflower Compact, it describes a voluntary association of individuals, all of whom shall be governed by laws for the common good in this case, for a healthy commonwealth.

    In his inaugural speech as Speaker, elected in his 26th year of service in the House of Representatives, Speaker DiMasi quoted this passage from our Constitution, when he described a CommonWealth and the public interest that his members were charged with protecting.

    This became his platform for health reform shared responsibility.Employers would be encouraged to take responsibility for a healthy and productive workforce, Individuals would, for the first time, be required to obtain health insurance, andGovernment would HAVE to invest in helping individuals to afford health insurance that will enhance their access to regular medical care and preventive care

    all with the goal of making quality health care affordable and accessible to virtually every resident of the Commonwealth.Here are some numbers that illustrate the scope of Chapter 58: Health reform by the numbers

    Some numbers that illustrate the scope of Chapter 58: - It contains 147 sections in over 116 pages in its printed version- It amends 22 chapters of the General Laws- It affects or creates 19 state entities-- give or take one or two, depending on your operational definitions- And, its provisions are expected to combine to expand access to insurance coverage for over 500,000 residents of the Commonwealth.

    Clear message here that this was a comprehensive legislative package.And, heres the WHATRegulations by DHCFP, DOI, Connector, DORA major piece of the employer responsibility component in Chapter 58 is the new Employer Fair Share Contribution, a per-worker assessment that replaced the original House payroll assessment. It will apply to:--Employers with more than 10 FTEs, who--Offer a group health plan, and--Do NOT make a fair and reasonable contribution to the premiums The Director of DOL is required to determine the amount of the contribution annually, and in consultation with the Division of Health Care Finance and Policy. It is set, in the new M.G.L. Section 188 of Chapter 149, not to exceed $295, per worker (NOT per FTE) The contribution is to be collected by the Division of Unemployment Assistance.

    Two calculations:The annual Fair Share Employer Contribution: based on the per-user share of private sector liability to the Uncompensated Care Pool, which is the sum of hospital liability plus third-party liability divided by the number of individuals whose care was reimbursed by the Pool. Then adjusted for the percentage of employers who are defined as non-contributing. Employer As contribution: Total number of hours worked divided by the product of the number of employees X 2,000 hoursThe so-called Free Rider surcharge would penalize employers whose employers or dependents use services that are reimbursable by the uncompensated care pool.

    HIRD Health Insurance Responsibility DisclosureThe first requirement for all residents 18 years and older to obtain health insurance coverage if there is a policy affordable to them.

    It will be implemented along with the affordability schedule set annually and submitted to the legislature by the Connector.

    Its enforcement is in two phases:

    Beginning in April 2008 with the filing of taxes for Tax Year 2007, the penalty will be the loss of personal exemption.

    For the Tax Year 2008, the penalty will be 50% of the monthly premium of the least expensive insurance product affordable to that individual.

    There are exemptions permitted on the basis of religion and hardship.

    And, an appeals process will be available through the Connector.The Commonwealth Health Insurance Connector is a new state authority that was created as a central mechanism connect individuals and small businesses with health insurance products, and to administer the new Commonwealth Care Health Insurance Program.

    It represents probably the most significant addition to the health insurance landscape, and one of the most ambitious and central areas of implementation of many pieces of Chapter 58.We know that nearly 80 percent of people who have received services through our Uncompensated Care Pool are below 200% of poverty.

    Perhaps the most significant state investment included in Chapter 58 is to help these residents purchase affordable health insurance.

    Administered by the Connector, Commonwealth Care, or CCHIP, is our new subsidized health insurance program its funded with redirected funds from the Uncompensated Care Pool and is part of the new Safety Net Care spending under the new 1115 waiver.

    Commonwealth Care is expected to offer access to health insurance to over 200,000 previously uninsured Massachusetts residents, through sliding scale subsidies.

    Subsidies are available to individuals with incomes up to 300% of the Federal Poverty Level, with no deductibles,

    And, there are no premiums at all for people up to 100% of Poverty.

    On October 2, the Connector accepted the first application to Commonwealth Care, which announced-- for the up to 100% population-- products with comprehensive benefits, including dental, vision, prescription drugs, and mental health and substance abuse services through the states Medicaid Managed Care Organizations

    Since October 1, 30,000 people below the poverty line have been determined eligible for Commonwealth Care, and 14,384 of those people have enrolled into one of the Commonwealth Care health plans.

    Commonwealth Care products for the 101-300% of FPL folks are being developed and are on track to launch by January.Not meant for you to be able to actually read, but here is a graphic of the timeline of implementation of Chapter 58 I mentioned that its aggressive, and significant dates extend well into 2009. I will note the dates that are relevant to the provisions that I mention, as they come up.

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