For Immediate Release - April 13, 2011

PATRICK-MURRAY ADMINISTRATION ANNOUNCES $80 MILLION IN EXPECTED SAVINGS FOR COMMONWEALTH CARE

BOSTON -- Wednesday, April 13, 2011 -- The Patrick-Murray Administration today announced bids for next year's Commonwealth Care subsidized health insurance program are expected to save $80 million, allowing state funding to remain level, even as enrollment is projected to grow by 11 percent. A number of the managed care organizations that provide coverage in the program submitted bids for next year at significantly lower rates than their current rates, resulting in the savings.

"This is not only great news for taxpayers, but also for consumers who will continue to receive comprehensive, affordable coverage," said Governor Deval Patrick. "Under the Commonwealth Care program, we are spending taxpayer resources wisely, while dramatically expanding care to thousands of uninsured residents."

The savings come after the Commonwealth Health Connector initiated a new procurement effort that seeks to achieve cost savings in Commonwealth Care by encouraging competition and innovation among health plans. The Connector Authority board of directors will meet on April 14 to finalize the bids.

"More than 98 percent of Massachusetts residents have health care coverage, thanks to programs like Commonwealth Care," said Lieutenant Governor Timothy Murray. "We have worked hard to make health care universally accessible, and now we must continue our efforts to make it universally affordable."

The Commonwealth Care program currently serves 158,000 Massachusetts residents, and was funded at $822 million for FY11. Governor Patrick has proposed level funding for the program for FY12, which will be possible with the new savings, even as enrollment is expected to grow to 175,000. While rates paid to the carriers by the Commonwealth have increased an average of five percent annually since 2006, next year's average net capitation rates came in five percent lower than this year's average rates.

"The state's new fiscal reality demands that we change the way government does business to stretch every taxpayer dollar as far as possible to preserve critical programs and services," said Secretary of Administration and Finance Jay Gonzalez, who also chairs the Health Connector board of directors. "The Connector's innovative procurement strategy is a change that has yielded the results we need and has continued high-quality health insurance coverage for those who need it at a lower cost for taxpayers."

In addition to the savings, current benefits will be maintained with only small, cost-neutral changes in co-pays, and base enrollee premiums will remain at 2008 levels for Commonwealth Care members who opt for the lowest-cost plans. The projected growth in enrollment is primarily influenced by Massachusetts residents moving off of unemployment benefits and losing related insurance coverage.

"Restricting enrollment, cutting benefits and increasing copayments has been the nation's cost containment policy for decades, but it is not ours," said Glen Shor, Executive Director of the Commonwealth Health Insurance Connector Authority. "We chose a path that encouraged competition and innovation among the carriers and we're gratified by the results."

Among the cost improvement initiatives planned by the carriers for next year are use of more limited networks, re-negotiated contracts with providers, and new medical management programs.

Massachusetts leads the nation in the percentage of residents with health insurance, with more than 98 percent of people covered. Since passage of health care reform legislation in 2006, which served as a model for the national law, the rate of insurance coverage has increased for all income levels and among all racial and ethnic groups. The Commonwealth has achieved near universal coverage for children, with 99.8 percent insured, including an increase of 20,000 children enrolled in MassHealth during the past year alone. While Massachusetts has shown national leadership in expanding access to health care, costs continue to be a challenge.

Governor Patrick recently filed a bill to lower the cost of quality health care for consumers by giving the health care industry incentives and freedom to innovate and find lower cost ways to deliver better care.

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