2 reasons why the Connector can't meet small biz insurance needs

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Two thoughts on why the Massachusetts Connector has done such a horrible job meeting the demands of small business for affordable health insurance choices:

(1) Some say that it is all Governor Patrick’s doing. Certainly, elections matter, and the Governor has paid no attention to the issue until recently, and in a really ham-handed way (price controls! yup, that’s a great idea…). But it’s more complicated than that. The fact is that the Connector was created in a very topdown manner that is not helping to meet the needs of a dynamic set of customers. A Boston Globe report on August 4, 2006, three months before the 2006 election, noted the following:

The four Medicaid plans that will be offered to low-income uninsured Massachusetts residents starting October 1 are likely to be nearly identical… That means the plans, called Medicaid managed-care organizations, will compete mostly on price, their networks of doctors and hospitals, and customer service.
The plans, to be sold by four state-licensed Medicaid insurers, will be based on an existing Masshealth insurance plan for single adults.
“In order not to confuse enrollees and to facilitate them being able to make reasonably informed choices, some standardization of the benefit package is advantageous,” said Jon Kingsdale, the head of the Commonwealth Connector.

“We don’t understand why it has to be so standardized,” said one of the insurance companies. “All of the MMCOs will end up developing a similar plan design, which limits creativity and flexibility, which would help drive down costs. Let the consumer make the choice in the end.”

But customers did not get many choices. And, what we needed was leadership to push Jon K and his Board to focus on small business insurance with the perspective that choices matter. Which brings us to the second problem.

(2) The board is too institutional — translated, that means that they are too risk averse:

Among the institutional players who are risk averse for a variety of different reasons: Jay Gonzalez (Guv’s admin), Jon Kingsdale (kind of Guv’s admin plus ambition had him looking at DC), Jonathan Gruber (nothing can blow up while he’s working on fed legislation), Nancy Turnbull (tough to stick her neck out for more products), Joseph Murphy (uh, no), even Dolores Mitchell (GIC options are almost all bells and whistles options, so how can she advocate for anything less?).

Then there are representatives of union interests: Louis Malzone (ED, MA Coalition of Taft-Hartley Funds) serves as ED of the Health and Welfare Trust Fund IUOE Local 877 (MA), Local 70 (MN) and SEIU Local 615/888, etc. And also Celia Wcislo who is the Assistant Division Director, 1199SEIU United Healthcare Workers East.

Rick Lord is certainly for more options. Terry Dougherty and Ian Duncan are likely more open to such options.

So, at best, we are at an 8-3 split that tends to be more institutional and union-focused.

The result: On small business insurance, Utah has two people working in their “connector” and they have signed up more people in less than a year than MA in 4 years. MA has dozens of execs in the Connector who earn lots of dough and are afraid of failing, so they are control freaks.