Rethinking The Benefits Mandate in Mass.

Eric H. Schultz, president and CEO of Fallon Community Health Plan, says Massachusetts must consider a "minimum" health insurance plan with fewer state-mandated benefits or risk an exodus of employers:

As our nation gets closer to its health care reform finish line, it’s critical to examine the potential impact on Massachusetts residents, and on our own health care reform, which we all worked hard to implement. National health care reform should allow us to preserve what’s working well, while at the same time provide opportunities for improvement.

And there is a lot that works well in Massachusetts:

-- We’ve achieved nearly universal health insurance coverage.

-- Residents have access to a wide variety of health plan options through the Health Connector.

-- We have in place many of the health insurance consumer protections being debated nationally, such as guaranteeing access to coverage regardless of health status and ensuring that consumers can renew their coverage regardless of medical history.

-- Our health plans are consistently ranked among the top in the country, in terms of clinical quality and member satisfaction.

--On average, 90 cents of every premium dollar goes directly to pay for the cost of medical care our members receive, as compared to a much lower average number for the rest of the country.

Yet this last point also alludes to what’s not working well in Massachusetts: the cost of care. We now have the highest health care costs in the country, and our medical cost trends only fortify this unenviable position.

National reform financing strategies include taxes on high-cost “Cadillac” health insurance plans, as well as other taxes on health insurance premiums. The negative impact on Massachusetts becomes clear given our health insurance premiums are higher because our health care costs are higher.

One area to consider is the Massachusetts definition of minimum creditable coverage (MCC), as compared to definitions contained within the various national reform bills. Those bills define MCC in broad terms to give each state flexibility in designing their specific benefits. Equally important, the bills set MCC actuarial requirements at a much lower level than we currently use in Massachusetts.

So what might this mean? Because of our rich MCC, Massachusetts may end up requiring employers and individuals to buy a more expensive insurance plan built on the most expensive health care system in the nation. This variance could easily fuel a major exodus of employers — especially small employers — and individuals to lower-cost states, with serious ramifications for state revenues.

Massachusetts has served as a model for national reform, something we can all be proud of. But we have a health care cost crisis that threatens all we’ve accomplished. We need to keep the spotlight on cost drivers and take necessary actions to reduce the trend – which means that there can’t be any sacred cows, including maintaining MCC that’s potentially higher than every other state.

It’s not in our best interest to change benefit structures for all health insurance products. But could the less rich national MCC definition pave the way for Massachusetts to offer what so many consumers want — health insurance with fewer state-mandated benefits? Larger businesses that are self-insured already have this flexibility. Why not use this opportunity to do the same for others?