Questions and Answers

Commonwealth Care Health Insurance Program

Q: Who can buy from the Connector?
The policies offered through the Connector will be individual policies. Groups of 2-50 can either buy from the Connector or purchase insurance through the traditional small-group market.

Q: Can groups choose any plan within the Connector?
Yes. Employees can choose any plan offered.

Q: What is the role of the agent in the Connector?
Everyone purchasing health insurance from the Connector will have the choice of either purchasing coverage through an agent or directly from the Connector. If an individual or small group uses an agent to purchase insurance from the Connector, the agent will receive a commission. If the individual or small group buys directly from the Connector, no commission will be paid. The Massachusetts Association of Health Underwriters is closely monitoring this situation.

Q: How much will policies cost?
Neither policy designs nor cost information are currently available. At first, Governor Romney established a target premium of $200 a month. However, average premium estimates have risen to over $300 a month.

-The Massachusetts legislation offers little health insurance market reform other than allowing younger persons to purchase “mandate-lite” plans and making HSA contributions income tax-deductible. We do not yet know what benefits the “mandate-lite” plans will include.

-The reform does allow people who purchase non-group policies to receive the same tax advantages as group polices, which will help people currently purchasing policies with after-tax dollars.

-NAHU members in Massachusetts report that a major carrier is planning to price its Connector products with and without agent commissions.

Q: Can this reform be passed in other states?
Insurance reform will have to be crafted to each state; this is not a “one size fits all” model. Some items to consider:

-Massachusetts has one of the lowest uninsured rates in the country (between seven and 11 percent, depending on the data source).

-States with high uninsured rates (i.e., Texas, Florida and New Mexico) could not afford Massachusetts-style universal insurance reforms; large uninsured populations would require extensive subsidies.

-Many states have a well-functioning individual health insurance market; Massachusetts does not. States like Maine and Mississippi already have 20 percent of their state residents on Medicaid. Can states with large Medicaid enrollments avoid a TennCare-like financial debacle?

Q: Is there enough money for to pay for all of this?
At this point, we don’t know. We don’t know how much policies will cost, how much will be needed to make them “affordable,” or how much money the employer assessment will rise.

Q: What is NAHU doing about the situation?
Our chapter in Massachusetts has been actively monitoring the progress of this measure through both the legislative and regulatory processes. Currently, our chapter is trying to ensure that agents who sell Connector products will be compensated, and MAHU is also providing commentary to policymakers on the other details of the program as it goes through the regulatory process. NAHU is also monitoring Connector-style legislation that may be introduced in other states during 2007 and providing assistance to chapters in the states where this is likely to come up.

NAHU currently does not have a formal position statement on individual mandate legislation similar to what was passed in Massachusetts. The Legislative Council has formed an Individual Mandate Working Group to examine this issue. It is the Council’s goal to develop a position statement for the Board of Trustees’ approval prior to the mid-term elections in November.