Tufts Medical Center, its physician group, and the publicly-traded parent company of MetroWest and St. Vincent hospitals have been awarded an $88.5-million loan by the federal government to create what would be the state’s only member-owned health insurance plan.
The nonprofit Minuteman Health Initiative expects to offer coverage starting in January 2014 to individuals and small businesses through the state’s virtual health insurance market, the Massachusetts Health Connecter, and through insurance brokers. The organizers say the plan’s ownership structure would help it to hold down costs.
With the Massachusetts program, and another announced Friday in Tennessee, there have been 20 “consumer operated and oriented” plans approved by the Center for Medicare & Medicaid Services. Every state is required to have one under the Affordable Care Act.
“We don’t have anything on the market like this” in Massachusetts, said John McDonough, a Harvard health policy professor who had a hand in drafting the federal law. “This could belly flop. This could end up doing nothing. And this could be in the category of Steward [Health Care], a disruptive innovation worth watching.”
The organizing groups in Massachusetts, which include Vanguard Health, have created a panel of industry experts to set up the plan. Ultimately, though, the members of the health plan would elect a board of directors and make up a majority of people who serve on it.
“Consumers who are members of this plan will ultimately participate and be in control of the governance long-term,” said Ellen Zane, former chief executive of Tufts Medical Center and chairwoman of the plan’s starting board.
Surpluses beyond what the plan needs to comply with state and federal laws would be returned to members or used to lower premium costs, said Eric Beyer, who succeeded Zane as Tufts chief executive. Members would have a say in the design of coverage options.
The plan would allow providers to work more closely with employers on wellness programs and to streamline billing processes to save on administrative costs, Beyer said. It’s not clear which hospitals and doctors would be included in the plan’s network. Seventeen have signed letters of support for the plan, but Beyer and others declined to say which.
The plan, which still must get approvals from the state Division of Insurance, is aiming for a “broad base of providers who are willing to work at those rates that are sort of closer to the median” in prices and will not accept large disparities in payments to providers, Beyer said.