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Healthcare premiums set for state's uninsured
The Boston Globe
Healthcare premiums set for state's uninsured
Low-income residents to pay $18-$106
http://www.boston.com/news/local/articles/2006/09/02/healthcare_premiums_set_for_states_uninsured/?page=full
By Liz Kowalczyk, Globe Staff | September 2, 2006
Uninsured lower-income Massachusetts residents who earn just enough to escape poverty will pay about $18 a month for coverage under the state's new health insurance law, while those who make more will pay up to about $106.
State regulators approved the rates yesterday, and said they are amounts most lower-income residents should be able to afford. The law will require all residents to have health insurance by July 1, 2007, or face tax penalties.
Members of the board overseeing implementation of the law said they were swayed by information showing that most lower-income people with private insurance through their jobs pay at least this much, and in many instances more. The members of the Commonwealth Health Insurance Connector also said they worried that if the state charges lower-income people too little, employers that offer insurance will drop it, eventually sending droves of workers to seek state-subsidized insurance, which could bankrupt the program.
``When you look at what other states do, this is very generous," said Richard Lord, chief executive of Associated Industries of Massachusetts, the state's largest business lobbying group and a member of the Connector board. ``The last thing we want to do is encourage those employers to no longer provide coverage to their employees."
Only one member of the 10-person board voted against the recommended premiums. ``I work with low-wage people," said Louis Malzone, executive director of the Massachusetts Coalition of Taft-Hartley Funds, a group of multi-employer health plans. ``When you're earning $16,000 a year, you're thinking in terms of pennies a week. People will have to give up other necessities."
Pop-up GLOBE GRAPHIC: Monthly rates
For weeks the board has been debating how much to charge residents for coverage who earn between 100 and 300 percent of the federal poverty level , with many advocates for the poor contending that people have told them they cannot afford the amounts approved yesterday.
A single person in that range would earn $9,804 to $29,412 a year, with their annual insurance payment accounting for 1.8 percent of their income, or $18 a month, at the low end of the range, and 4.7 percent, or $106 a month, at the upper end. Couples would pay twice the dollar amount as single people.
Co payment amounts will vary, from $20 for a visit with a specialist to $250 for a hospital stay. Some people would be able to choose plans with lower co payments for doctors visits, medications , and other services, and would have to pay slightly more toward their premiums.
The state will subsidize premiums for those earning between 100 and 300 percent of the poverty level, while it will pay premiums in full for uninsured residents who earn less than the poverty level.
The total amount of the premiums is not yet known, as health plans are still calculating the cost of their plans.
Some families already pay a premium to the state-federal Medicaid program to cover their children. They will continue to pay that premium in addition to the cost of their own coverage. As a result, a couple with one child, for example, would pay $36 to $240 each month toward health insurance premiums, depending on income.
Voluntary enrollment in these plans is expected to start Jan. 1, but the program becomes mandatory July 1, unless individuals show they cannot afford the contributions.
That decision may rest on families' varied financial situations and expenses.
Cendra Cesar, 33, is a single mother with an 8-year-old son. She runs a day care service in her home in Lynn, and said she earns $25,000 to $30,000 a year, depending on the number of children she cares for. That puts her slightly over 200 percent of the federal poverty level for a family of two.
Under the rules adopted yesterday, she probably would pay $40 to $60 a month for insurance. Her son has insurance through his father.
With expenses such as rent, child care, and college costs , she said that amount may be too steep for her. When she calculated her budget, she estimated she could afford about $10 a month for health insurance. She could give up classes, she said, but then ``I won't be able to get the job that has the health insurance."
She said she's hopeful premiums will come down, as plans compete with one another to attract enrollees. Barring that, she said she would buy insurance and cancel it if it turns out she can't afford it.
Ed and Louise Hetzler said they believe the amounts are affordable for them. The Hudson couple said they earn $24,000 to $25,000 a year running their own music business, giving lessons, and performing. But they have already paid for their home, so they have low housing expenses.
They are eager to buy health insurance because Ed , 58, was diagnosed with diabetes earlier this year and is paying about $400 a year for medications and another $200 a year for office visits with a nurse. Louise , 55, hasn't been for a check-up in years and would like insurance so that she could get preventive care.
At just under 200 percent of the federal poverty level, they would pay roughly $80 a month.
``That seems reasonable to me, not just for us but for everyone," she said. ``People without this help would be spending $8,000 or $9,000 a year on insurance."
When the insurance mandate takes effect in July, residents who believe they cannot afford the contributions can appeal to the Connector to avoid tax penalties. But the board has not decided how to handle appeals, and whether each person's financial situation will be reviewed individually, said Jon Kingsdale, executive director of the Connector.
Board members said they will monitor the number of people who enroll in the program; they could decide to lower the contribution amounts in a year if enough people do not enroll because they cannot afford to.
The Greater Boston Interfaith Organization, which has been holding budget workshops to help people determine what they can afford, said the approved fees are too high for a mandatory program. Brother Jack Rathschmidt of Our Lady of Lourdes in Jamaica Plain said the group has collected data on about 250 people so far, and for about half, the new fees are too high.
Many hospitals also are concerned that enough people won't enroll in the subsidized health plans. One intent of the law is to decrease use of the free care pool, a fund that provides free or subsidized hospital care to lower-income, uninsured residents. The pool, however, does not cover all the expenses, and many hospitals lose money on it and end up subsidizing the care themselves.
© Copyright 2006 Globe Newspaper Company.
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