"Connector Vote An Important Step, But Key Decisions Lie Ahead" by Bruce Bullen

Last Thursday, the Connector Board took a major step forward in implementing the health reform law. The Board unanimously endorsed a broad range of product choices from seven carriers, including Harvard Pilgrim. These products will be available on May 1st, with coverage effective July 1st.

Consumers will be able to choose from a range of plans - comprehensive to basic - and many individuals will be able to buy on a pre-tax basis, significantly reducing their cost of coverage. Given the high cost of health care in Massachusetts, the fact that consumers will have more affordable options is very good news.

But the really hard work is just beginning. In a few weeks the Connector Board will define the minimum level of coverage a person must have to comply with the individual mandate. The board will also determine who, if anyone, should be exempt from the individual mandate. Individuals who do not have coverage that meets the minimum standard and who are not exempt from the mandate will be required to pay a tax penalty. I urge the Connector Board to proceed cautiously with these decisions.

For health reform to succeed, we need to persuade those without coverage to buy it and those with coverage to keep it. If we set the minimum standard too high we defeat the purpose of the law by making it difficult for those without coverage to buy. If we also require those who are currently insured to "buy up", we risk an unintended backlash.

By setting a minimum coverage standard, Massachusetts will be the only state in the nation to define a floor for adequate coverage. As one of the only states in the nation to lose population in recent years, we need to create a climate where people want to live and bring up their families and where employers can create and grow jobs. Setting the minimum coverage standard too high could impede our ability to remain economically competitive.

Setting the affordability standard is a problem that may be even thornier. An individual mandate is critical to the financial viability of the health reform law. Through universal participation we reduce our reliance on the uncompensated care pool, allowing us to use these funds to provide people with coverage. We also create a broader insurance risk pool, which ensures that the merger of the small group and nongroup markets does not precipitously raise costs for our state's small businesses. Some individuals with unique financial circumstances may need exemptions, but we will jeopardize the financial foundation of health reform if we weaken the mandate substantially.
Universal participation, consumer choice, and building on the realities of the current marketplace are key to successful implementation of the next phase of the law.