The Connector Board convened their first of two February meetings today. In an ambitious agenda, they primarily discussed the 2012 Affordability Schedule and the FY13 Commonwealth Care procurement.
Materials from today’s meeting are here and our full report is below the fold.
Executive Director’s Report (Glen Shor, Executive Director)
Glen Shor provided an overview of current program enrollment and the future of Business Express.
February 1, 2012 Program Enrollment
- CommCare: 158,490 (slight increase from January)
- CommChoice: 39,333 (slight decrease from January)
Tomorrow, Business Express will relaunch with all of the most popular Massachusetts insurance carriers:
- Blue Cross Blue Shield of Massachusetts
- BMC HealthNet Plan
- CeltiCare Health Plan
- Harvard Pilgrim Health Care
- Health New England
- Fallon Community Health Plan
- Neighborhood Health Plan
- Tufts Health Plan
The Business Express website will generate quotes in seconds, and allow employers to compare plans “apples to apples.” There will be a choice of six levels of coverage, for a total of 53 different health insurance plans to choose from. There are no user fees to shop, and all employers that sign up for a plan through Business express can also choose to participate in Wellness Track, a workplace wellness initiative started through the Connector in 2011. Some employers that participate in Wellness Track will be eligible for at 15% premium rebate. More details about Business Express will be presented at the second February board meeting.
Remote Participation of Connector Board Members (Ed DeAngelo, General Counsel)
The Attorney General made an amendment to the open meeting regulations that permits remote participation (web/phone) of Board members. However, there must be a quorum physically present. In addition, certain conditions apply to be able to participate remotely (for example, geographic distance). Secretary Gonzalez emphasized that remote participation is the exception rather than the rule. The Board voted unanimously to allow Board members to participate remotely under specific conditions.
2012 Affordability Schedule (Kaitlyn Kenney, Director of Policy and Research & National Health Reform Coordinator)
Through the Board’s affordability workgroup and overall Board discussions, there is an emerging consensus that an affordable premium should be based on one’s income, not insurer premium increases. That is, when income decreases, people have less to spend on health insurance and when income increases people have more to spend on health insurance.
Jon Gruber noted, “This is the first time the Board has made a statement that the right measure of affordability is income, not premiums.” This is a turning point for Gruber himself, who used to believe affordability changes should be tied to changes in the cost of coverage, to ensure the individual mandate’s reach. What changed his mind is the fact that the vast majority of uninsured Massachusetts residents are below 150% fpl, and thus not subject to the mandate penalties. There is also broad agreement among Board members that a progressive Affordability Schedule makes more sense than a flat percentage.
For the calendar year 2012 Affordability Schedule, Connector staff recommend an increase in premium contributions of 1.5%. For CommCare members, this means a premium increase of $1 for Plan Type 2B members, $1 for Plan Type 3A members, and $2 for Plan Type 3B members
Connector staff based this decision on the following rationale:
- Maximum monthly premium contributions have not been adjusted in all brackets in multiple years.
- The Federal Poverty Level (FPL) guidelines released in January and the subsequent Massachusetts cost of living (COLA) adjustments released in March will result in an increase in the upper bounds of the income brackets of approximately 3%.
- A 1.5% increase in premium contributions amounts represents about half of this inflation and balances differential impacts of adjustments resulting from our bracket based structure (i.e. people’s income changing which moves them between brackets or in different places within a bracket).
The Board will have additional opportunities to reevaluate and modify their approach to the Affordability Schedule in preparation for implementation of the Affordable Care Act in 2014. Glen Shor highlighted the success of the Massachusetts individual mandate up to this point. The next step is to take a fresh look at the subsidy and Affordability Schedule with ACA implementation. In this regard, several state agencies, including MassHealth and the Connector, plan to work together to use the best data available to inform their decision making.
The Board voted unanimously to release the proposed 2012 Affordability Schedule for public comment.
CommCare FY13 Procurement (Jean Yang, Chief Financial Officer; Daniel Apicella, Manager of Health Care Finance; Jen Flint, Manager of Operations, Commonwealth Care)
While the economy is recovering, FY13 will continue to be a fiscally challenging year. MassHealth, Commonwealth Care, the Medical Security Program, and the Group Insurance Commission (GIC) are on track to cut costs in FY12 and plan to carry through additional cost savings ideas in FY13.
Gov. Patrick included $974 million in funding for Commonwealth Care in his proposed FY13 budget, and has made a commitment to maintaining benefits in MassHealth and CommCare. The CommCare funding level includes $156 for reintegration of “special status” legal immigrants, who will be reinstated into CommCare in FY12 (see our report for details on the reintegration plan).
CommCare enrollment is expected to reach 208,000 in FY13, largely due to the reintegration of legal immigrants, and to a smaller extent transition of Medical Security Program members to CommCare due to anticipated expiration of federal unemployment benefit extensions.
To frame the FY13 procurement conversation, Daniel Apicella and Jen Flint gave an update on the FY12 CommCare oversight initiative, including information on cost utilization and the CommCare member survey.
- MCO membership: Both Network Health and CeltiCare – the two current lowest cost plans – gained membership in FY12, while all other plans lost or had flat membership.
- MCO financial health: According to FY12 Quarter 1 data, both Network Health and CeltiCare broke even with their new rate structures.
- Utilization: Also using FY12 Q1 data, it appears that the lowest cost MCOs’ utilization did not notably decrease from FY11 to FY12, and it does not appear to be systematically lower relative to higher-cost MCOs.
- Member survey: According to survey results, CommCare continues to have high member satisfaction; however, there was a slight decline in satisfaction with customer service, which the Connector is taking steps to address.
Glen Shor added that the principal cost savings in FY12 comes from unit cost, not utilization. Nancy Turnbull added that there tend to be significant differences in member satisfaction across plans, but not across plan types. Celia Wcislo added that there should be an additional effort to make sure CommCare members actually see their primary care physicians to address any health problems early on (which can also be a cost saver).
Jean Yang emphasized that in order to stay on budget and meet the needs of new members, CommCare capitation rates must remain flat in FY13. Therefore, the Connector is proposing an aggressive FY13 procurement strategy with the following bidding rules:
- Bid ceiling: MCOs are allowed to bid at or below the capitation bid ceiling of $415 per member per month (PMPM, includes medical + admin).
- Bid floor: MCOs can bid below the bid floor of $354.58 PMPM, provided that the bidder can demonstrate actuarial soundness to the satisfaction of the Connector’s independent actuary.
- Enrollee contribution: Plant Type 2 and 3 members who choose the lowest cost MCO will be subject to the base enrollee contribution. Plan Type 2 and 3 members who do not choose the lowest cost plan will be charged more than the base premium, corresponding to each plan’s bid differential.
- Limited choice for new Plan Type 1 members: New Plan Type 1 members without a recent coverage history with a participating MCO will have limited choice of the lowest cost plan and the second lowest cost plan (as long as that plan is at our under $380 PMPM).
- Active open enrollment contingency: If fewer than 2 MCOs bid equal to or lower than $380 PMPM, an active open enrollment will be conducted for Plan Type 1 members, meaning that PT1 members who do not affirmatively choose a plan will be assigned to the lowest cost plan.
The Connector will continue to apply risk adjustment (with a few refinements), and maintain current stop loss and risk sharing arrangements. The FY13 MCO contract would run for 12 months, from July 1, 2012 to June 30, 2013, with the option for a contract extension for July-December 2013.
The Connector plans to release the FY13 CommCare RFP on February 16, with bids due back to the Connector on March 16. They anticipate a Board vote on the FY13 CommCare MCO contracts in April.
The Connector is also working on two additional CommCare initiatives in FY13:
- Payment reform pilot: The Connector is working with MassHealth to explore a “shared savings” pilot program, based on experience with the Patient Centered Medical Home Initiative. The pilot will provide incentives for MCOs and providers to transition to alternative contracting models and to better coordinate members’ care.
- Tobacco cessation: The FY13 budget includes $2 million to align Commonwealth Care’s tobacco cessation benefit with that of MassHealth.
The next Connector Board meeting is scheduled for Thursday, February 23 from 9:00-11:00am at One Ashburton Place, 21st floor.