Shake-up envisioned in health insurance

By Christopher Rowland, Globe Staff | November 7, 2005



The drive to provide health coverage for Massachusetts' uninsured could have a much wider impact: It may lead to major changes in everyone's health insurance.



Governor Mitt Romney and other political leaders propose covering many of the 500,000 state residents who lack insurance with high-deductible plans that require them to pay the first $250 to $1,000 of their annual healthcare bills. In return, such plans would have lower monthly premiums than traditional coverage.



If any one of the healthcare overhaul plans under consideration on Beacon Hill passes intact, state officials say, a ripple effect is likely. High-deductible plans would also be attractive to employers who have endured five consecutive years of double-digit premium hikes for standard health insurance; the state's HMOs could aggressively promote them; and employees would be allowed to take their health plans from job to job -- effectively seeding the marketplace.



''This is a paradigm shift. It wouldn't be surprising to me that you will see a lot more people actively taking these things up," said Timothy R. Murphy, Romney's secretary of health and human services. ''Large employers that we speak to are exploring a number of different options."



About 60,000 people have such insurance in Massachusetts, fewer than 1 percent. Nationwide, 1 million to 2 million are enrolled in high-deductible plans, according to industry estimates. Those numbers may soon increase.



According to results of a survey of 86 large national employers released last week, 45 percent plan to offer such plans.



The survey, conducted by Fidelity Investments, said the average projected savings on premiums would be 6 percent.



The shift toward more out-of-pocket expenses for consumers is controversial. Critics, including Massachusetts healthcare consumer groups, say it will encourage people to forgo routine doctor visits and vital preventive care, like pap smears and mammograms.



They also worry that the plans will be most attractive to the healthiest people, leaving a high concentration of high-risk patients in traditional plans and making their coverage more expensive.



Proponents argue that people covered by traditional health plans have no incentive to shop for price or quality. Making them bear more of the cost of routine care would change that, they say.



A leading health consumer advocate in Massachusetts, John McDonough, executive director of Health Care for All, in Boston, supports State House proposals to expand coverage for the uninsured. But he opposes the broader use of high-deductible plans.