The state, now armed with seed money, is moving ahead with the Charter Oak Health Plan proposed by Gov. M. Jodi Rell last December for uninsured adults who don't qualify for programs serving lower-income residents.
How eagerly insurers will bite is another matter.6
The state, which will soon put out a request for proposals, has decided that insurers wanting to serve the Charter Oak plan should also participate in Connecticut's Husky A and B insurance programs. All three programs will be bid together.
In addition, it is not certain whether insurers will find the state's proposed $250 monthly maximum premium for Charter Oak to be feasible for the co-payments and scope of benefits the state envisions.
The Husky A program, aimed at children from low-income households, has about 205,000 to 210,000 children in it and roughly 90,000 adults. Husky B, which is only for children and designed for somewhat higher income levels, currently has 16,000 to 17,000 children from households earning up to 300 percent of the federal poverty level.
"We think we'll have more participants and respondents if we allow Charter Oak vendors to participate in a known quantity, a known population" which the Husky programs represent, said Social Services Commissioner Michael Starkowski.
The General Assembly in June approved $13 million to get Charter Oak off the ground, with a start date of July 1, 2008 - none too soon for the tens of thousands of uninsured residents it's supposed to help.
Of the funding, $2 million is for startup and administrative costs and $11 million is for premium subsidies in the first year of operation for people earning up to 300 percent of the federal poverty level. That's about $61,950 for a family of four in Connecticut this year.
The state expects to subsidize Charter Oak members on a sliding scale, bringing the $250-a-month premium down as low as $75 for some people.
A typical individual policy in the private market can easily cost $570 or more a month for a man age 60 to 64, and more than $450 for a woman age 55 to 59 in Connecticut. Many people have found they don't qualify for health insurance because of medical problems, or are quoted higher prices because of them.
The Charter Oak plan was one of many health care reform proposals put forth in this year's legislative debate. Insurers praised Rell for taking a market-based approach, making use of private-sector insurers, but some advocates of universal health care feel Charter Oak falls short of their goals.
The Charter Oak plan would have a maximum lifetime benefit of $1 million. It would have up to a $1,000 annual deductible on a sliding scale based on income. If a couple is being insured, the state is hoping their deductible would be something less than $2,000.
To keep premiums affordable, a member would pay 20 percent of such services as diagnostic tests and hospitalization after the deductible, up to a certain limit.
The Department of Social Services envisions co-pays for doctor visits ranging from $25 to $50. However, Starkowski says the request for proposals will allow insurers some flexibility in the structure of benefits and co-pays to try to meet the $250 premium target.
Insurers also might want to tinker with the prescription co-pays for the plan that the state initially proposed. It was suggested as a three-tiered program with the cheapest co-pays of $10 to $15 for generics, $35 for brand names on the insurer's list, and $50 to $55 for brand names not on the list.
Some insurance industry officials wonder whether Charter Oak will have many takers if companies have to serve Husky programs, too. Husky A is currently served by Anthem, Health Net, Wellcare, and Community Health, while major Connecticut insurers such as Aetna, CIGNA, and ConnectiCare are on the sidelines.
Aetna says Charter Oak "is the kind of health care program that we support," and hasn't ruled out participating in Husky programs, either. But the company is reserving judgment until it sees the state's request for proposals.
ConnectiCare would love to participate in Charter Oak and looks forward to seeing the state's outline for the program, but it hasn't had any desire to enter the Husky programs, said company spokesman Stephen Jewett.
"Creating a new insurance program like Charter Oak on its own is going to be challenging enough," Jewett said. "At this point, they should not try to bring some of the other state insurance programs into that."
Starkowski, though, notes that at least Husky offers known populations with a track record of claims to help insurers figure what reimbursement they need to run those programs. He thinks that will encourage insurers to take on Charter Oak, because it's not known who and how many people will flock to the program or how heavy their use of health services will be.
Keith Stover, a lobbyist for the Connecticut Association of Health Plans, predicts every company will look at the state's proposal, though some could hesitate over the Husky-Charter Oak linkage.
"There's no question everybody wants to be part of the solution" for the uninsured, Stover said, "but you could see there's some potential for this not being attractive."
Reprinted with permission of the Hartford Courant.
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