Rell’s affordable health plan may soon be unaffordable

A piece of Gov. M. Jodi Rell’s legacy is in jeopardy: Beginning in September, the state will substantially increase the premiums for new and recent enrollees in the Charter Oak Health Plan, which Rell started three years ago as an attempt to offer affordable insurance to the uninsured.

Mark Schaefer, director of medical care administration for the state Department of Social Services, said the change will likely make Charter Oak unaffordable to new enrollees who don’t have health problems, and will be contrary to the original goals of the program.

But he said the increase, which has not yet been determined, is unavoidable.

The premium increase stems from changes made to the current biennial budget that prohibit the state from subsidizing Charter Oak for anyone but those enrolled in the program before June 1, 2010. The program costs will now have to be based on claims experience, and Charter Oak has attracted many people with health conditions, a high-cost population.

The change coincides with an effort to get more people to enroll in a federally subsidized insurance plan for people with pre-existing conditions, which has so far attracted only about 70 people. DSS is seeking to lower the monthly premium costs for most people in the Connecticut Pre-Existing Condition Insurance Plan, or PCIP. But those in Charter Oak won’t likely be able to move to PCIP, and for some, staying in their current plan will be unaffordable, Schaefer said.

“We really are eliminating our affordable health care coverage,” Sen. Edith G. Prague, D-Columbia, said after hearing about the changes at a meeting of the Medicaid Care Management Oversight Council Friday.

Charter Oak has 9,446 enrollees and costs $307 per month. Low-income enrollees who were part of the plan before June 2010 receive monthly subsidies of between $50 and $175, but those will be reduced to between $35 and $115. Premiums for PCIP range from $242.66 to $893, based on a person’s age. For anyone 30 and older, Charter Oak is the less costly plan.

But DSS is seeking permission from the federal government to change the PCIP premium to a flat rate, regardless of age, and make it more affordable to most enrollees. Kristin Dowty, a DSS health program associate, said the department has proposed a rate of $381 per month, although it could change depending on what federal health officials allow.

Schaefer said he is most concerned about people who are now in Charter Oak and will face premium increases, because they will be unable to move into PCIP. Federal rules prohibit anyone from joining PCIP if he or she had health insurance in the past six months, so a person in Charter Oak would need to go without coverage for six months to join PCIP. For some in Charter Oak, the cost of staying in the program will be more than they can afford, Schaefer said.

As part of the changes in the budget, people who qualify for PCIP will not be allowed to join Charter Oak. Currently, people who are eligible for both can join either plan. After Sept. 1, those who meet the PCIP requirements except for having had insurance in the past six months will still be allowed to join Charter Oak.

PCIP was created as part of the federal health reform law as a way to cover people whose medical conditions have left them unable to get insurance. It is meant as a temporary measure until 2014, when insurance carriers will be prohibited from excluding people with pre-existing conditions.

Considered a signature program of Rell’s administration, Charter Oak faced criticism from the start from some state officials and patient advocates, who took issue with the limited benefits it offered.

As of September, the plan will no longer have annual benefit limits, Schaefer said.

Dr. M. Alex Geertsma, a Waterbury pediatrician on the Medicaid council, said the Charter Oak experience illustrated the problem of requiring plans to cover pre-existing conditions while not requiring people to have insurance. As costs rise, people without medical needs drop off, leaving the plan to largely cover people with high medical costs.