Health plans sold via state likely to cost 5% more

Email|Print| Text size + By Alice Dembner
Globe Staff / February 14, 2008

Premiums for private health insurance plans sold through the state are likely to rise an average of about 5 percent over last year's prices - roughly half as much as plans for people covered through their employers, according to a state memo released yesterday.

The moderate increase expected for nonsubsidized Commonwealth Choice plans is good news for the state in its attempt to keep private insurance affordable for moderate income people who do not have access to insurance through work. The program represents a small part of the state's healthcare reform initiative.

"The market is beginning to listen to the need for cost control," said Celia Wcislo, assistant division director of the labor union 1199 SEIU and a member of a state panel overseeing the insur ance program.

"It's what we need more of to make sure this reform succeeds long-term," she said.

About 16,000 people are currently insured through Commonwealth Choice, and the state expects another 7,000 to purchase the insurance by the end of June.

The rate increases would take effect July 1. Some individuals could face increases as low as 2 percent, depending on the particular coverage they choose, while others could see substantially larger increases.

In some cases, the modest premium increases will come as a result of trade-offs for higher costs for an office visit or for prescription drugs, but in others the insurers are finding ways to provide the same benefits for a modest increase, according to the memo, prepared for today's board meeting of the Commonwealth Health Insurance Connector.

The connector had pressed insurers to curb increases for the second year of the plan in the hope that they could set an example for the larger insurance market.

"If the insurers can do it here, why aren't they doing it for the employer-sponsored market?" Wcislo asked in a phone interview yesterday.

In September, major health insurers in the state predicted premiums would increase about 10 percent this year for most people covered through their jobs.

A spokesman for the state's largest private insurer, Blue Cross and Blue Shield of Massachusetts, said the company is making similar adjustments in work-based plans if employers ask.

"We alter the benefits, change the cost-sharing, and otherwise alter the account to get to what is affordable for them," said the spokesman, Christopher Murphy.

The connector board is expected to review the proposed premiums and any benefit changes at its meeting today and vote either today or in a few weeks on whether to accept the insurers' bids.

Six insurers provided coverage in the first year - offering a range of plans from basic to comprehensive - and all six have bid to continue offering insurance sanctioned by the connector.

As of last July, when the plans first went on sale, the least expensive coverage available to a 37-year-old in Boston was $184 a month through Neighborhood Health Plan.

As of July 2008, that same individual would pay $194 if the bids are accepted - about a 5 percent increase, according to a connector spokesman, Richard Powers.

Proposed premium increases for plans offering that same basic level of coverage range from 2 to 8 percent, according to the memo, prepared by Robert Carey, the connector's director of planning and development. Since rates are also determined by the age of the policyholder, some individuals may see larger increases.

These premium increases would not affect about 170,000 low-income people on state-subsidized plans, but those individuals could see separate increases in premiums and copayments yet to be determined.

The connector is today expected to review a staff proposal to raise office and drug copayments for some of those individuals.

Alice Dembner can be reached at

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