Connector Board Discusses Product Offerings & Wellness Regulations

Yesterday was the first Connector Board meeting with the Health Connector’s new Executive Director, Jean Yang, and with the previous Executive Director, Glen Shor, chairing the meeting in his new role as Secretary of the Executive Office of Administration & Finance (ANF).  Before diving into the substance of the meeting, there was a lovely send-off for outgoing ANF Secretary Jay Gonzalez, as well as recognition to Shor for his work at the Connector and Jean for stepping up to lead the Health Connector. We join the entire Chapter 58 community in thanking Jay for his outstanding stewardship of health care reform, and wish him well.

Materials from the meeting are here. Read on for our full report.

2014 Seal of Approval: Exchange Product Platform

Kaitlyn Kenney, Director of Policy & Research, National Health Care Reform Coordinator presented the Board with staff recommendations for ACA-compliant standardized plan offerings beginning January 1, 2014.  To ensure alignment with the Governor’s FY2014 budget proposal, the Connector is pushing back the 2014 Seal of Approval (SoA) RFR release from January to February of this year.

The Connector’s main goal in the 2014 SoA is to have a strong Exchange product portfolio that meets the needs of a diverse customer base and offers cost-effective, innovative, and easy-to-compare products.

The Connector conducted a “market scan” of current plan offerings in the small and non-group merged market to help inform their standardized plan strategy for 2014.  Here is what they found:

  • Deductibles have become the “norm” in the market: Enrollment in plans with deductibles of at least $1,000 (individual)/$2,000 (family) have increased from 3% in 2006 to 55% in 2012.
  • Co-insurance and HSA-compatible plans have slow take-up: Less than 5% of the most popular plans reviewed had co-insurance and none were a federally-qualified Health Savings Account (HSA)-compliant plan.
  • Narrower-network and tiered-network plans are a growing trend: Narrower-network plans cover a subset of providers in the market with uniform member cost-sharing, while tiered network plans include a carrier’s full network with differential member cost-sharing depending on the provider who delivers the care.
  • The market continues to be dominated by HMO plans: Over 80% of the merged market population is covered by HMO plans.

Plans in the Massachusetts market are highly concentrated on the Platinum and Gold tiers, according to federal AV standards.  Since the Connector’s current metallic tiers are not tied to AV levels, plans will be re-categorized to coincide with federally required AV levels.

While the federal premium tax credits are tied to the Silver tier, the high concentration of Gold and Platinum plans in Massachusetts does not necessarily decrease affordability for consumers.  The Connector plans to wrap federal premium and cost-sharing subsidies through a subset of Silver level plans for enrollees below 300% FPL to preserve affordability standards for this population.  The Governor’s FY2014 budget proposal will inform the details and final recommendation for the “QHP wrap.”

The Connector plans to maintain a base of standardized plans for the non-group and small-group offerings, while retaining the option to add a select number of “high value” non-standardized plans (e.g. tiered networks) and bring in additional non-standardized plans for small groups only.  They proposed:

  • 9 standardized plans:  2 Platinum, 3 Gold, 2 Silver, 1 Bronze and 1 Catastrophic.
  • Requiring carriers with more than 1,000 commercial members to offer at least one tiered-network plan in either the Platinum or Gold tier.
  • Allowing each carrier to offer a maximum of 10 non-standardized plans.
  • Beyond the minimum requirement, carriers have the flexibility to choose whether a plan will be offered to small groups only or to both individuals and small groups.

Kenney reviewed potential standardized plans for 2014 within each tier.  Connector Board members engaged in a lively conversation about the differences between plans within each tier and which would be better for consumers.

Nancy Turnbull requested data that compares non-group and small group plan enrollment, with an eye towards whether there is concentration of membership in a certain type of plan/product, to help determine what consumers want.  Kenney responded that the Connector had done focus groups with Commonwealth Choice members and are working to balance between offering meaningful choice while not overwhelming people with too much choice.

Jon Gruber suggested thinking about plans within clusters of plan structures by lumping plans with only small differences into the same category, and then choosing plans from these clusters.  Lou Malzone stated that businesses make decisions around health care in relation to their profit and often shift costs to employees.  He continued that the proliferation of products in the marketplace makes it difficult to ascertain which products actually have traction and suggested an effort to reduce the number of plans in the marketplace.

Gruber expressed support for establishing a standardized plan with co-insurance, particularly with the rollout of price transparency in the state.  He argued that co-insurance can move people to receive services at lower-cost providers.  Turnbull, on the other hand, argued that co-insurance does not currently work for people since cost information is very difficult to obtain, and until costs are transparent and easy to access, co-insurance is a problem.

Final Wellness Regulations

Ashley Hague, Chief of Staff & External Affairs/Assistant General Counsel and Kristin McCarthy, Health and Wellness Coordinator, reviewed and requested a vote on the Connector’s final wellness regulations.  After reviewing comments, Connector staff recommended not making any changes to the draft regulations released at the November 16th board meeting.

As a refresher, the wellness regulations revise eligibility criteria for employers to earn a rebate of up to 15% on their share of health insurance premiums;

  • Retain prior focus on small employers with up to 25 employees;
  • Eliminate any salary restriction;
  • Make small groups eligible for rebates for three years of completing wellness requirements; and
  • Make program available for eligible small groups shopping through the Connector and participating in Wellness Track, either directly through the Connector or through a licensed sub-connector.

The Board voted unanimously to approve these regulations.  The next Connector Board meeting is scheduled for Thursday, February 14th from 9-11 at 1 Ashburton Place, 21st floor.
-Suzanne Curry

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