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State Planning to Tighten Rules for Free Care

Posted on: Wednesday, 3 August 2005, 15:01 CDT

Aug. 3--Two weeks after Governor Mitt Romney proposed legislation to provide health insurance for all state residents, his administration is moving to change the rules for a "free care" program in ways that advocates say could make it harder for the uninsured to get healthcare.

Under the rules, which would become effective Oct. 1, hundreds of thousands of uninsured residents would have to pay $3 to $5 copayments toward their medical care, which studies have shown can scare away poorer patients. In addition, some patients who currently get services through the state's free-care program, but have other options for coverage, would be excluded, and prescription coverage for all uninsured would be restricted.

The moves are designed to make sure that the free-care program is not more attractive than MassHealth, the state's Medicaid insurance program for low-income patients, according to the administration. It wants to encourage more patients to enroll in MassHealth, in which costs are shared by the state and federal governments.

Financing of the free-care program -- $502 million for fiscal year 2006 -- comes from taxpayers, hospitals, and health insurers. An additional rationale for the changes, the administration said, is to make the free-care pool more like the insurance plans that Romney's legislation lays out.

"We don't want the pool to be a better deal than MassHealth," Paul J. Cote Jr., state commissioner for healthcare finance and policy, said of the new rules, which were proposed Monday and do not require legislative approval. "We want to eliminate any disincentive to patients enrolling in the Medicaid program."

But advocates say the new proposals run counter to Romney's goal, detailed in legislation filed last month, to provide health coverage for the roughly 500,000 Massachusetts residents without insurance. Romney's legislative plan, along with separate proposals from the Senate president and from a coalition of advocates and healthcare providers, are awaiting action by the Legislature's Joint Committee on Health Care Financing.

"This is going to make it harder for people without means to get necessary medical services," said John McDonough, executive director of the Boston-based advocacy group Health Care for All. "The administration is legitimately and laudably interested in expanding coverage to more people, but, at the same time, they are widening the cracks into which people will fall."

The free-care program provided medical care to more than 480,000 people last year, at a cost of about $750 million. The program paid $580 million, leaving healthcare providers to pick up the difference.

The program is designed to serve patients who are able-bodied or who earn too much to qualify for Medicaid, but who cannot afford private health insurance. The Legislature and the administration have been trying to cut the costs.

On Jan. 1, at the direction of the Legislature, the state began requiring uninsured patients to get primary care at community health centers instead of hospitals, a move expected to save at most $2 million a year. On Oct. 1, 2004, the administration mandated that patients seeking free care first apply for MassHealth. Cote said cost-savings were not a driving factor behind the new regulations.

Under Romney's health insurance plan, the free-care program would be eliminated. Instead, he would mandate that everyone get health insurance. He proposes to enroll more people in Medicaid, to allow insurers to offer reduced-premium private coverage for those of moderate means, and to subsidize that coverage for low-income families who make too much to qualify for Medicaid.

Within the new free-care regulations, advocates are particularly concerned about a proposal to charge uninsured patients $3 for every visit to a community health center and $5 for every hospital visit or inpatient admission, regardless of the medical condition or treatment. In addition, they would pay $3 for every refill of a generic prescription drug and $5 for a brand-name drug.

The proposed copayments are higher than fees imposed on Medicaid patients. While modest, the fees could pose a problem for many who currently get free care, advocates said. Last year, 95 percent of free-care patients had incomes below 200 percent of the federal poverty level, which was $18,620 for an individual.

Several state and national studies have found that even small copayments discourage patients from getting healthcare, according to the Center on Budget and Policy Priorities, which surveyed research on the topic. A study commissioned by RAND Health found that low-income patients who faced copayments grew sicker than those without copayments. For low-income adults at risk of heart disease, the study found that copayments increased the risk of dying by about 10 percent, according to the center.

But Cote said the administration doesn't expect the new rules to scare away patients.

"We don't believe that this will be a barrier to care," he said. "We want to change patient behavior to be more like that of insured patients, and we want to make sure that those who can afford to pay their fair share do so."

Keith Rudolph, a father of two young children who lives in Dorchester, said the copayments would probably reduce his use of the free-care program. Rudolph, 37, supports his family on $30,000 a year, about 160 percent of the federal poverty level for a family of four.

While his children qualify for MassHealth, neither he nor his wife does. Insurance through his employer, a Boston human resources firm, would cost $600 a month for the family, far more than he can afford.

"I'm forced to rely on free care," he said. He suffers from sleep apnea, and his wife suffers from pain and disability related to a crooked spine.

While he said he could afford a few copayments, he objects to paying for care that often doesn't meet his needs.

"I don't want a free ride, but I don't want to pay for something that's so limited," he said. Rudolph said that he had been unable to get surgery to correct his sleep apnea and that his wife was unable to get the pain medication she needed.

Under the proposed rules, the Rudolph family could have access to fewer prescription drugs. The free-care program would only pay for drugs covered by MassHealth, instead of a larger list. Hospital services would also be limited to those covered under MassHealth.

Some individuals now eligible for free care would also be excluded from coverage under the rules. They would bar unemployed patients who choose not to buy insurance from their former employer despite a premium subsidy provided by the state. They would also bar patients who have been dropped from supplemental MassHealth programs for failing to pay premiums or deductibles.

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Source: The Boston Globe

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