State Law Eclipses Stalled Health Plan

Health Insurance Reform Bill May Spell an End for Vineyard-Based Project, but Backers Are Still Optimistic


The ground-breaking mandatory health insurance law signed by Massachusetts Gov. Mitt Romney last month could spell the end of a Vineyard-based health insurance program that has been struggling to get off the ground for the past four years.

Backers of the Island Health Plan say the new state law will benefit their scheme, not make it redundant, because the law will speed up a federal waiver allowing them to assist low-income Islanders who do not qualify for Medicaid.

The Vineyard plan will offer more customized insurance to Islanders, said Cynthia Mitchell, executive director of Island Health Inc. in Vineyard Haven, the group that is backing the Island Health Plan, but still does not provide an insurance program. Ms. Mitchell said the Island health insurance plan will go into effect alongside the state program for uninsured and underinsured residents, once it gets under way.

But others are not so sure.

"That's a good question," said Cape and Island Rep. Eric T. Turkington, who voted for the state health insurance law. In many ways, Mr. Turkington said, the Island Health Plan concept was a precursor to the state law. "There's everything from soup to nuts in there," Mr. Turkington said of the state law. "So the Island plan is probably not needed anymore," he added.

Tim Walsh, chief executive officer for the Martha's Vineyard Community Hospital, also said he believed the Island plan may become moot. "It's a pretty sustainable plan they are putting together," Mr. Walsh said of the state health insurance law. He said the plan drew positive reviews at a recent statewide conference of hospital exceutives in Newton.

The plan has been waiting for more than a year for a waiver from the federal Centers for Medicare and Medicaid. Under that waiver, the plans would provide assistance for people who don't qualify for Medicaid coverage, but who have incomes up to 300 per cent of the federal poverty level.

State legislators previously signed off on the Island Plan waiver. But federal Medicaid officials have been reluctant to act until it was clear what reforms Massachusetts would enact, Mrs. Mitchell said. She said officials anticipated Massachusetts would be seeking a similar waiver for the entire state.

Mrs. Mitchell said that she and Neighborhood Health Plan, the Boston-based health maintenance organization that would be a provider for the Vineyard plan, are waiting for more information on the action plan for the new law, which will require every Massachusetts resident to purchase health insurance by July 1, 2007.

She said details have been scant, but she does expect wholesale change in how health insurance coverage is organized in Massachusetts.

Mrs. Mitchell said Island Health has signed contracts with Martha's Vineyard Hospital and more than a dozen family care physicians and specialists on the Vineyard and Cape Cod under which the hospital and those providers would agree to participate in the Island Health network. Services also would be available from providers in the Neighborhood Health network.

Mr. Walsh said the hospital signed the service contract with one important caveat: the hospital did not agree to include Medicaid patients in the plan. Medicaid patients make up a significant percentage of the uninsured population, although Mrs. Mitchell insisted that the exemption makes no difference to Island Health.

Mrs. Mitchell said a key difference, and an improvement, of the state plan over the Vineyard plan is that the Massachusetts plan is based on individuals while the Island Health Plan has been employer-based.

The projected cost of the Island Health Plan to consumers has never been stated with any certainty.

The Island Health plan was spun off from the Dukes County Health Council in 2001, after the council found that nearly 20 per cent of Islanders lacked health insurance. The idea called for banding together the Island's uninsured population under a single, private health insurance company, leveraging the group's volume to secure competitive rates.

Mrs. Mitchell's salary, benefits and travel expense were originally paid through a $103,000 grant from the Lighthouse Alliance, a regional collaborative formed to address access barriers for the uninsured population on the Cape and Islands. The grant ran out in 2004 and her salary was then funded through a startup grant from the Rural Health Clinic, another program of Island Health Inc.

In January 2004 Island Health said it hoped to roll out an insurance program for the residents of the Vineyard and Nantucket by the end of the year.

But the plan never materialized.

The intent of the state reform law is to make health insurance available to every Massachusetts resident within the next three years.

According to information provided by the governor's office, about 500,000 Massachusetts residents are uninsured. Of that group, about 100,000 are eligible for Medicaid, which provides medical coverage for the poor.

Another 200,000 making less than 300 per cent of the federal poverty level, but not eligible for Medicaid, will receive insurance premium assistance on an income-based sliding scale, and the remaining 200,000 with incomes above 300 per cent will be able to buy lower-cost policies in the private market.

The state will provide premium assistance by redirecting part of the $1 billion now spent by the state on the uninsured.

Starting Jan. 1, 2008, individuals who fail to buy health insurance will lose the amount of their state tax refund equal to 50 per cent of an affordable health insurance premium. The state also will assess penalties for each month without coverage.

The state House of Representatives approved the bill in a bipartisan vote of 154-2. The state Senate voted 37-0 for the bill. Mr. Turkington and state Sen. Robert O'Leary, the Cape and Islands legislators who represent the Vineyard, both supported the bill.

Mr. Turkington said health insurance coverage is an issue that has dogged Massachusetts for the past three decades. He said the state is addressing the issue by bringing "everyone in on the act" - including individuals, employers and state government.

"How it works depends on its implementation," he said. "There are a million big questions that won't be answered until the plan is put into place."