Rosemarie DayDeputy Director and Chief Operating Officer

3rd National Medicaid CongressFriday, June 6, 2008

Washington, DC

Massachusetts Health Care ReformConnector Update

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Agenda

I. FY08 Highlights Reformed the market Established CommChoice Implemented the individual mandate Did lots of outreach!

II. Results So Far

III. Future Challenges

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Reformed the marketMerged non-group and small-group markets

Merger results: Expanded product offerings Enlarged the risk pool Improved affordability

I. FY08 Highlights

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Improved Affordability:Twice the coverage at half the price

A non-group market example:

Pre-reform plan choice for 37-year-old: Monthly premium of $335 No Rx coverage $5,000 deductible

Post-reform plan choice for 37-year-old: Monthly premium of $175 Rx coverage $2,000 deductible, with office visits and ER coverage

prior to the deductible

I. FY08 Highlights

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Young Adults Small Biz.

Voluntary Plans Indiv.& Families

Established “Commonwealth Choice” programConnector is an “exchange” that brings the market together.

I. FY08 Highlights

6

Launched the website Increased transparency and simplified the consumer experience

I. FY08 Highlights

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Standardized BenefitsEasy to shop and compareConnector’s Commonwealth Choice program has 3 tiers of health plans (Gold, Silver and Bronze, plus a 4th for Young Adults):

I. FY08 Highlights

Tier Benefits

Gold

• Average monthly cost = $337 to $548 (for a 35 year old individual in the Boston area)• $0 to $15 each time you go to the doctor• Choice of large number of doctors and hospitals

Silver

• Average monthly cost = $269 to $391 (for a 35 year old individual in the Boston area)• $0 to $30 each time you go to the doctor• Additional cost-sharing required at point-of-service• Some plans may limit which doctors and hospitals you can use.

Bronze

• Average monthly cost = $193 to $285 (for a 35 year old individual in the Boston area)• $0 to $40 each time you go to the doctor• Highest amount of cost-sharing required at point-of-service• Some plans limit which doctors and hospitals you can use

Young Adult

• Average monthly cost = $158 to $195 (with Rx, for a 25 year old individual in the Boston area)• Highest cost-sharing required at point-of-service• Most plans include an annual benefit maximum • Only available to people between the ages of 18 to 26, without access to employer sponsored

insurance

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Created a Pre-Tax BenefitIncreases affordability

Reform law requires employers to set up Section 125 Plans for most employees

Connector allows employers to extend pre-tax premium payment option to employees who are not eligible for their group plan by establishing “voluntary plans” with the Connector

Marketing the opportunity directly to employees

I. FY08 Highlights

The Connector is making CommChoice insurance more affordable with its pre-tax program (“Voluntary Plan”).

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Implemented Individual MandateThe Tax Form

I. FY08 Highlights

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“I got it” advertising campaign

Strategic partnerships

Grassroots efforts

Postcards from the Department of Revenue

Did Lots of Outreach…

I. FY08 Highlights

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… and Lots of Advertising

I. FY08 Highlights

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05/22/2007 11:29 AM ET

Connector teams up with Red Sox to build enrollment in new health insurance plansOther corporate/civic partnerships announced as part of public education campaign

… And the ultimate corporate partnership in Massachusetts

I. FY08 Highlights

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Every tax filer received a postcard from the Department of Revenue…

I. FY08 Highlights

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People responded: Weekly Visits to MAHealthconnector.org

-

10,000

20,000

30,000

40,000

50,000

60,000

5/5

5/1

9

6/2

6/1

6

6/3

0

7/1

4

7/2

8

8/1

1

8/2

5

9/8

9/2

2

10

/6

10

/2

0

11

/3

11

/1

7

12

/1

12

/1

5

12

/2

9

1/1

2

J uly 1st: Mandate goes into effect.

Nov. 15th: Final push to sign- up to avoid 2007 tax penalties

I. FY08 Highlights

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Agenda

I. FY08 Highlights

II. Results So Far

III. Future Challenges

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Broadened Access:340,000 Newly Insured

Composition of Newly Covered

MassHealth17%

CommCare, Free37%

CommCare, Contributory

14%

ESI25%

Non-group7%

II. Results So Far

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Steady Growth in Commonwealth Care

II. Results So Far

Enrollment (000's)

0

100

200

Nov

'06

Dec

'06

J an

'07

Feb

'07

Mar

'07

Apr

'07

May

'07

J un

'07

J ul '07 Aug

'07

Sep

'07

Oct

'07

Nov

'07

Dec

'07

J an

'08

Feb

'08

Mar

'08

Apr

'08

May

'08

Premium-payingNo premium

As of May 2008, 176,879 members:• 50,371 premium-paying (28.5%)• 126,508 no premium (71.5%)

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Decreasing reliance on Free Care

II. Results So Far

HSN & CommCare in FY07 & FY08 MA state budgets ($ millions)

$598

$447

$128

$625

$0

$800

FY 2007 FY 2008 (proj.)

Health Safety NetCommonwealth Care

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Steady Growth in Commonwealth Choice

II. Results So Far

Members (000's)

0

10

20

J ul'07

Aug'07

Sep'07

Oct'07

Nov'07

Dec'07

J an'08

Feb'08

Mar'08

Apr'08

May'08

As of May 2008, 18,122 members:• 14,186 subscribers• 3,936 dependents

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Steady growth in pre-tax program: “Voluntary Plan” enrollments (cumulative)

II. Results So Far

1,386

2,4332,570

2,699

2,058

1,726

961

2,794 2,816

3,080

36 90206

361

641

764 861 891 920 992

0

1,000

2,000

3,000

Aug '07 Sep '07 Oct '07 Nov '07 Dec '07 J an '08 Feb '08 Mar' 08 Apr '08 May '08

Employers Employees

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Most employers are doing their fair share.Those who are not owe fair share assessments totaling $6.7 million to date.

II. Results So Far

MA Employers with 11+ FTEs who have filed FSC reports for 2006-2007

Offer insurance97%

Owe fair share assessment

3%

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Agenda

I. FY08 Highlights

II. Results So Far

III. Future Challenges

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Challenges Ahead

Rising health care costs Though now a platform from which to address

Mandate: can’t exempt too many people or reform is meaningless

Employer-sponsored insurance: a blessing and a challenge Base of our system but incentives are misaligned Crowd-out considerations

How many uninsured are there really? Good survey data is key Non-citizens

Continued state and federal funding

III. Future Challenges

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Rising Health Care Costs

III. Future Challenges

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Employers are required to make “fair share” contribution if they don’t contribute to health insurance

Individual mandate can put job market pressure on employers to provide health insurance.

Crowd-out provisions for premium assistance programs (waiting period, cost-sharing) are included.

III. Future Challenges

Maintain/Enhance Employer Support

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Maintain/Enhance Employer Support

55 percent of MA employers agree with requirement to offer or pay fair share contribution (41 percent oppose)

Employers offering ESI in 2007: MA: 72 percent US: 60 percent

Growth of ESI in MA, 12 months ending Jan. ‘08: 85,000 newly covered lives

III. Future Challenges

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Good News

Surveys show broad awareness of the law and continued public support.

Employer survey shows that employers largely support health care reform and few signs of crowd-out yet.

State Legislature is renewing its commitment to fund Health Care Reform.

Many state leaders are calling for serious health care cost containment efforts.

Connector Board is very focused and working together effectively.

III. Future Challenges