Massachusetts Connector Likely To Approve Health Insurance Exemptions

April 17, 2007 – 10:58 am | posted in Health Insurance

The Massachusetts Commonwealth Health Insurance Connector on Thursday likely will approve a proposal to exempt almost 20% of uninsured residents from a state law enacted last year that requires all residents to obtain health insurance, the Boston Globe reports. Under the law, state residents who do not obtain health insurance could face fines or tax penalties. However, the law requires that the state exempt residents who cannot afford health insurance, with the definition of affordability left to the Connector. The proposal that the Connector likely will approve would exempt from the law about 60,000 low- and moderate-income residents who do not qualify for state subsidies, or about 1% of the population (Dembner, Boston Globe, 4/12). Proposal Details
Under the proposal, single individuals with annual incomes less than $40,001 would have to pay no more than 9% of their incomes, or about $300 monthly, to obtain health insurance, and those with annual incomes less than $25,000 would have to pay no more than 3.3% of their incomes, or $70 monthly (Belluck, New York Times, 4/12). In addition, the proposal would expand state subsidies to 52,000 of the lowest-income individuals and families that qualify for Commonwealth Care, the health insurance program sponsored by the state (Boston Globe, 4/12). The proposal would extend health insurance at no cost to individuals with annual incomes less than $15,315 and families of four with annual incomes less than $30,630. Individuals with annual incomes between $30,630 and $50,001 would not qualify for state subsidies, but the proposal would exempt them from fines and tax penalties, provided that they could not obtain health insurance for less than $150 to $300 monthly (New York Times, 4/12). The proposal also would reduce the cost of health insurance by an additional $5 monthly for individuals with annual incomes between $15,000 and $20,000 who qualify for Commonwealth Care. The expanded state subsidies would increase the estimated cost of the law for the fiscal year from $470 million to about $483 million. Massachusetts officials said that the state would use funds previously used to pay for charity care provided by hospitals to cover part of the increased cost.

Reaction
According to the Globe, the proposal represents “a compromise between those who believed that broad exemptions were needed and those who argued that most people could afford new state-approved insurance plans” (Boston Globe, 4/12). Jon Kingsdale, executive director of the Connector, said that the proposal to establish the definition of affordability “was always the most difficult and innovative element” of the state health insurance law (New York Times, 4/12). Affordable Care Today, a coalition of advocacy and medical groups, on Monday told Gov. Deval Patrick (D) that the state must do more to help low- and moderate-income residents afford health insurance. The coalition recommended that the state increase subsidies for the lowest-income residents and exempt moderate-income residents from fines and tax penalties, provided that they must pay more than 4% to 8% of their annual incomes to obtain health insurance (Dembner, Boston Globe, 4/10). John McDonough, executive director of Health Care for All, said, “It doesn’t go the whole way, but it’s good enough for today,” adding, “I know there’s a lot of trash talk around the country about, ‘Oh it’s falling apart in Massachusetts.’ It ain’t true. We are going to be far and away the state with the lowest number of uninsured by a country mile” (New York Times, 4/12).

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