State Law Eclipses Stalled Health Plan

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

By JAMES KINSELLA

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."