Plan pitched to lower consumer health care costs
Bill would eliminate co-pays for treatment of seven illnesses
WHEN ADAM SCOTTO of Brookline left his job as a software engineer in 2018, he bought unsubsidized health insurance through the Massachusetts Health Connector for $473 a month. Scotto has been shocked at how quickly his plan’s premiums have risen, hitting $646 a month in 2021. He downgraded his plan to buy one with lower premiums, but now his out-of-pocket costs are rising. Because of that, Scotto is forgoing recommended treatments for a back injury.
“Unaffordable coverage left me managing budgets instead of my health,” Scotto told the Legislature’s Committee on Health Care Financing at a hearing Tuesday.
Massachusetts has long been a leader in ensuring residents have access to health insurance. But the state has struggled with controlling costs. While policymakers have taken steps in recent years to contain overall health care costs, consumer advocates are now urging lawmakers to focus more on reducing the cost consumers must pay through premiums, copays, and deductibles.
According to the Center for Health Policy and Analysis, in 2019, 17 percent of Massachusetts residents who were insured had medical debt. A majority of them owed more than $2,000, and 9 percent owed more than $8,000. Another CHIA report found that among Massachusetts residents with insurance in 2019, one-quarter reported forgoing necessary health care due to cost. CHIA has documented that out-of-pocket health care expenses have regularly been increasing at rates faster than inflation or wages.
Consumer advocacy organization Health Care for All is pushing a proposal introduced by Rep. Christine Barber, a Somerville Democrat, and Sen. John Keenan, a Quincy Democrat, which would take steps to reduce out of pocket costs. Most significantly, it would require insurers to cover care without copays for seven chronic conditions that disproportionately affect low-income communities of color. They are: diabetes, asthma/COPD, hypertension, coronary artery disease, congestive heart failure, opioid use disorder, and bipolar disorder/schizophrenia.
Barber said these diseases were picked because of their prevalence in poor communities of color. She compared the bill to provisions in the Affordable Care Act that required preventive care to be covered without copays, to make it easier for people to obtain basic care that prevents expensive complications.
“By reducing barriers to high value services such as care of chronic conditions, these bills promise to reduce health care costs, not to mention saving lives down the road,” said Dr. Carole Allen, president of the Massachusetts Medical Society, who supports the legislation. Allen said a diabetic patient who foregoes insulin can suffer permanent harm. An asthmatic child who cannot afford an inhaler may miss school, be hospitalized, or become depressed. Allen said focusing on racial equity makes sense, since Black and Latinx individuals are more likely than Whites to have unmet health care needs.
An actuarial study conducted for Health Care for All estimated that people with these seven conditions could save $500 to $1,400 annually on doctor’s visits and drugs, if the bill becomes law.
However, the policy would also increase health insurance premiums by 1 to 1.5 percent, according to the study.
To mitigate premium hikes, the bill proposes a “reinsurance” program, where the cost of the most expensive patients is moved to a pool where it is spread widely rather than borne solely by the patient’s insurer. That pool would be paid for by a fee imposed on insurers of large groups, which would raise an estimated $94 million. So people insured through large companies would see a premium increase of half a percent in exchange for decreasing premiums for small businesses and individuals by 2 to 3 percent. Federal funding could contribute between $10 million and $24 million.
Keenan said cost shifting is necessary because small businesses repeatedly cite health care expenses as a major barrier to hiring. “We want to make sure the burden on small businesses is lessened in whatever way we can,” Keenan said.
Health Care for All’s approach is drawing concern from insurers, who say eliminating copays and deductibles will not reduce health care costs but will only increase premiums. Lora Pellegrini, president and CEO of the Massachusetts Association of Health Plans, said in a statement that while the organization recognizes the challenges employers and consumers face with the cost of health care, eliminating copays for various services is not the answer, since it does not address the underlying problem, which is the cost of care.“Cost-sharing mechanisms are essential to help control health care costs, engage individuals in their health care choices, and keep monthly premiums at a minimum,” Pellegrini said. “Limiting benefits that may be subject to cost-sharing would eliminate the ability for employers and consumers to select health plans with these features and would increase premiums for all members, putting an additional financial strain on small businesses and working families.”
Rep. John Lawn, a Watertown Democrat who chairs the Committee on Health Care Financing, said he agrees with the importance of addressing consumer health care costs, but he stopped short of endorsing any particular proposal. Lawn said he had two young children and was starting his own business when his wife was pregnant with triplets. He struggled financially and deferred routine checkups and dentist visits because of cost. “I certainly understand how difficult this is on people,” Lawn said.