Massachusetts health insurance law could cost more than anticipated

Jan 23 2007

Monthly premiums under the proposed minimum requirements for the new Massachusetts health insurance law would cost an estimated $380 on average for an individual, according to a state panel, the Boston Globe reports.

Under the law, all state residents must obtain health insurance by July 1 or face tax penalties.

The panel, a subcommittee of the Commonwealth Health Insurance Connector board, on Friday outlined the proposed minimum coverage requirements, and the full board will vote on the requirements Monday.

Under the proposal, annual out-of-pocket expenses would be limited to $5,000 for an individual and $7,500 for a family.

Plans also at minimum would have to include coverage for some medical visits and generic prescription drugs, according to the proposal.

Deductibles would be capped at $2,000 for an individual and $4,000 for a family.

In addition, health insurers would be prohibited from limiting coverage per sickness, year or lifetime, and they would be barred from establishing a dollar maximum on coverage for any medical service.

According to a summary of initial bids by insurance companies, monthly premiums would average an estimated $380, compared with the $200 per month that former Gov. Mitt Romney (R) projected when he first proposed universal coverage.

The panel had expected monthly premiums averaging about $260 based on actuarial information the board reviewed last year.

According to Connector board staff, "most of the insurers' bids, the details of which have not been made public, came in much higher," the Globe reports.

Actual plan premiums will not be set for months, according to the Globe.

If the proposal is approved, at least 40,000 currently insured state residents would have to purchase additional coverage to meet the minimum requirements, Connector staff said.

The Globe reports that employers that currently "provide more extensive coverage could cut back to the minimum."

Eric Linzer, vice president of the Massachusetts Association of Health Plans, said, "There's really a limited number of ways you can make premiums affordable," adding, "If the minimum credible coverage is too high and coverage is unaffordable, it runs the risk of not achieving universal coverage."

Connector board Executive Director Jon Kingsdale said the panel should consider which rules could be enforced and recommended that some specific coverage details not be included.

Kingsdale said, "There's going to be a court challenge" to whatever the board decides (Dembner, Boston Globe, 1/20).