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Bill may undercut Mass. health effort

Kennedy criticizes Republican-backed insurance measure

WASHINGTON -- A healthcare bill being debated in Congress this week could undercut the new universal health insurance law in Massachusetts, by freeing insurers to brush aside state-required benefits and to charge older and sicker residents far higher premiums.

The Republican-backed measure, which is the centerpiece of the GOP's ''Health Week" agenda in the Senate, aims to reduce the number of uninsured residents by helping small businesses join together to purchase less expensive insurance for their employees.

Lower costs would be generated by releasing insurance companies from state requirements to cover an expanded array of treatments and screenings. The bill would also permit insurers to boost premiums for groups of workers who are considered greater health risks.

Senator Edward M. Kennedy of Massachusetts, the top Democrat on the Senate's health committee, said those changes would set back the state's efforts to achieve universal coverage. Older residents and those with major health problems could be priced out of the insurance market, and for-profit insurers could swarm the state offering subpar coverage, he said.

''We [in Massachusetts] have passed a good bill that will cover all the people in our state, no matter what their illness, no matter what their sickness," Kennedy said. ''This legislation on the floor of the United States Senate would effectively undermine that, and kill that legislation."

The bill states that it ''shall supersede any and all state laws" regarding mandated health coverage, in a manner that is similar to federal preemption of state statutes in areas such as banking, the environment, and energy regulations.

In this case, the right of the federal government to preempt state statutes will almost certainly be fought in court.

Kennedy is pressing his colleagues to block the bill because of the impact it would have on healthcare in Massachusetts and other states that have their own, higher standards for health coverage.

Democratic leaders expressed confidence yesterday that they will be able to delay the bill by filibuster today, although Republicans are promising to continue their push.

The plan for universal coverage in Massachusetts, crafted by the Legislature and Governor Mitt Romney, maintains the requirement that insurers offer an expanded menu of benefits.

Those benefits -- including treatment for alcoholism, mammography screenings, diabetes supplies, and mental health treatment -- would no longer be guaranteed if the bill passes.

To ensure that the healthcare coverage is affordable for everyone, the Massachusetts plan also strictly limits the premiums that can be charged by insurance companies.

It mandates that no business be charged premiums of more than roughly twice that paid by any other business for the same level of coverage -- regardless of the age or health status of its workers.

The federal bill, however, would allow insurers to charge a company with an older and sicker workforce up to 26 times more than it would charge one with a younger and healthier group of employees. Such coverage could be too expensive for many workers to afford, said John McDonough, executive director of the Massachusetts advocacy group Health Care for All.

''This would be a severe body blow," McDonough said of the bill. ''If a state is going to mandate individuals to buy coverage, the state has an obligation to make sure coverage will be available that's affordable. This bill would make that harder."

Some specialists, however, predicted that the impact would be minimal. Jonathan Gruber, a healthcare economist at the Massachusetts Institute of Technology, said bare-bones insurance policies have proven unpopular with employers, and probably wouldn't take hold in Massachusetts even if they become legal.

He added that companies are unlikely to increase premiums for companies, given competition among insurers.

''There's just not a lot of demand for stripped-down insurance," Gruber said. ''I don't see it being the death knell of this plan by any stretch."

Still, the potential impact on Massachusetts has put pressure on Romney to lobby against the bill. The not-for-profit insurance giants Tufts Health Plan, Harvard Pilgrim Health Care, Blue Cross and Blue Shield of Massachusetts, and Fallon Community Health Plan wrote a letter to Romney on Friday urging him to help scuttle the bill, arguing that the bill ''could in fact dismantle" the new universal coverage law.

Eric Fehrnstrom, a Romney spokesman, declined to comment on the bill but acknowledged that the governor's office has been in touch with GOP leaders.

''I think it's fair to assume the bill will undergo changes as it goes through the legislative process, and we will be monitoring developments closely," Fehrnstrom said. ''We share the same goal as our friends in the federal government, and that is to lower the cost of insurance."

The bill's backers say it would reduce costs for small businesses that are struggling to afford increasingly expensive healthcare policies, or that can't afford to provide coverage to their employees at all. Insurance companies can cut their costs by having national standards for insurance, instead of having to comply with different standards in every state, said Senator Michael B. Enzi, a Wyoming Republican who is the bill's chief sponsor.

''The thicket of competing state laws [has] made it too cumbersome to offer such plans," Enzi said.

The bill, however, strikes some as an intrusion on states' rights. Forty-one state attorneys general -- including Thomas F. Reilly of Massachusetts -- have registered their opposition, saying that it would ''erode state oversight of health insurance plans and eliminate consumer protections."

Under the bill, states that require insurers to provide expanded coverage and prevent discrimination based on age or health history would be blocked from doing so, said Alan Sager, a professor at the Boston University School of Public Health. ''The Enzi bill's approach would stomp and run roughshod over 100 years of precedent in states' rights to regulate insurance," Sager said.

Globe correspondent Alan Wirzbicki contributed to this report.

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