Next step for the Senate: Long term payment reform

S. 2437, the Senate President’s legislation to stabilize small group and individual insurance premiums passed yesterday after adding 24 amendments to its text (check out the redrafted amendments here).  You can watch the Senate debate here in a few days, but among the highlights was Senator Richard Moore’s opening explanation of the need for the bill and what it would do.  He made sure to announce that the long term payment reform bill would be the next step after this bill was passed and that it would be a bigger bill and would incorporate many of the good ideas people had raised. 

There were several dominant themes during the 5+ hour debate: the Insurer and Hospital Reserves Reports (recently issued by the Patrick Administration), the Hospital Assessment, the Connector’s role, Association Health Plans, and the need for more information.  There were also lighter moments in the debate including the ongoing back and forth between Senator R. Moore and Senator Tarr or the high commander of health care and the ancient mariner as they referred to each other. In the end, the bill passed 33-4 along party lines.

The original bill (see our blog here) required all parts of the health sector to make changes to lower premium rates of growth: insurers, providers, individuals, and business.  Among the amendments accepted were several that expanded on existing transparency and disclosure provisions including posting information on the internet and ensuring that all sectors of health care are evaluated including dental and children’s health. Several of the amendments adjusted the structure of the commissions and committees established in various provisions.  The GIC will also bring a wellness program to state employees- earning a light laugh from around the Chamber. The Hospital Assessment was modified so that if a hospital made a contract concession in FY10, then that concession would be taken into account when their assessment was determined by DHCFP. 

In a careful parsing of the Connector-related amendments, the Senate voted to study the merged market inside and outside the Connector to determine the impact of the Connector on plan offerings and premium rates.   The Connector will no longer be able to use data received from DOR for solicitations or advertising and they must give the Legislature 90 days notice before making changes to MCC standards. 

A compromise was reached regarding Association Health Plans.  The original bill included a study and a pilot program to evaluate whether these would be destructive or beneficial for the merged market.  The amended bill directs the DOI to create a structure for and approve 4 associations (with a maximum of 15,000 lives in each) at any given time.  These associations must operate like the rest of the merged market: offering all of the mandated benefits, treating preexisting and waiting periods in the same way, applying rating rules in the same way, applying continuing coverage in the same way, and complying with the open enrollment period.  Associations also need to implement wellness programs.  The impact of these associations on the merged market will be studied as well.  Finally, these associations will cease on December 31, 2014 in order to comply with the Federal SHOP law.

We thank the Senate for their leadership on this issue and look forward to working on long term payment reform after the budget.

Georgia Maheras
Private Market Policy Manager

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