Bay State Adjusts Exchange Program

Originally, Commonwealth Choice offered 37 different benefit packages, grouped in terms of actuarial value, or the percentage of routine care costs paid , rather than benefits package designs.

“Through subsequent focus groups, we found that our customers liked having some degree of choice but were overwhelmed by the blizzard of offerings on our shelf at that time,” Shor said. “In response to this feedback, we moved in January of 2010 to a reduced number of standardized benefit packages, currently 10, to cut through the confusion while still offering a reasonably diverse number of benefit choices.”

Like the designers of the PPACA exchange system, Commonwealth Choice managers have faced concerns about adverse selection, or the risk that sicker consumers might flock to certain plans and throw off their medical loss ratios.

Commonwealth Choice has allowed carriers to offer some plans with narrow, low-cost provider networks, or “limited network products,” but, to prevent carriers from using the limited network products to scare off sicker consumers, exchange managers require the carriers to offer the limited network products together with comparable broad network products, Shore said.

The Commonwealth Choice exchange has had trouble with attracting small employers, and managers are revamping the small group program to create a new Business Express program, Shor said.

Massachusetts will try to lure small groups by eliminating up-front fees for groups with 1 to 5 employees and offering some small businesses a free wellness program and a 5% premium subsidy.

Also at the hearing:

• Deborah Chollet of Mathematica Policy Research, Princeton, N.J., reported that private insurers provide coverage for only about 43% of Massachusetts residents with health insurance. Medicaid covers 26% of insured residents and Medicare covers 31%.
• Stacey Eccleston, assistant commissioner of the Division of Health Care Finance and Policy said the prices paid to the highest-paid hospitals are about 70% higher, overall, than the prices paid to the lowest-paid hospitals.
• Karen Teseng, an assistant attorney general, noted that, from 2005 to 2008, the more expensive Massachusetts hospitals gained market share while less expensive hospitals lost share. National policymakers have hoped that replacing fee-for-service provider payments with a strategy for bundling payments could help hold down health care costs, but, in Massachusetts, 3 of the 5 most expensive hospitals are paid using some kind of “global” arrangement.

Other Massachusetts health system change coverage from National Underwriter Life & Health:

• Massachusetts Recruits Co-Op Runners
• Consumer Reps: Navigators and Producers Can Share Exchange Business
• Researchers: Angry Brokers Slow Exchange Growth
• Bay State To Hike Penalties For Uninsured
• Massachusetts Nears Coverage Mandate Deadline