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Verdict Still Out: The Massachusetts Health Care Plan Faces Questions
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Verdict Still Out: The Massachusetts Health Care Plan Faces Questions

One year after the state passed its landmark universal care legislation, concerns are rising about costs and plan options, writes Samantha Hong.

Even as states such as California, Vermont, and Pennsylvania take further steps toward achieving affordable health care for all of their citizens, Massachusetts has taken its landmark health care plan a step further, requiring its residents to have health care coverage as of the beginning of this month. 

Problem is, the July 1, 2007 deadline for enrolling in a health plan has come and gone, yet many Massachusetts residents remain without health insurance. This has sparked concerns not just about how universal the state’s health care plan truly is but also about higher than expected premiums and the lack of affordable options for every income level. These concerns resonate not just in the states where health care reform is actively under consideration but also across the country as individuals, businesses, and health care providers recognize that fundamental health care reform is critical to our national economic and social well-being

The state’s new health reform legislation, signed into law on April 12, 2006 by former governor Mitt Romney, tackles the health care problem using a three-pronged approach. The plan expands MassHealth (Massachusetts’ Medicaid program), requires employers to cover their employees or pay a “Fair Share” contribution, and mandates that all individuals purchase affordable coverage or face a penalty through income tax filings.

In order to provide affordable care for everyone, the plan established the Commonwealth Health Insurance Connector to allow small businesses and individuals access to health insurance. The Connector, as it is more commonly called, offers seven plans to individuals and employers.

The other “affordability” component of the plan, the Commonwealth Care Health Insurance Program, offers sliding-scale subsidies for individuals with incomes up to 300 percent of the federal poverty line or roughly $60,000 for a family of four. Additionally, individuals under 150 percent of the federal poverty line are not required to pay any premiums for Commonwealth Care plans.  

These programs have worked, but only for some. Since April 2006, the Massachusetts plan has increased coverage for the state’s previously uninsured population of 650,000, but it still has a ways to go before reaching its goal of insuring 99 percent of the entire state’s population within three years. By May 2007, over 100,000 of the uninsured had gained coverage; 80,000 low-income adults had enrolled in the Commonwealth Care plans as of June 1, 2007, and there were 53,000 new enrollees as of March 2007 in MassHealth.

Although these numbers are likely to rise due to the six-month grace period that allows individuals to purchase coverage through Dec. 31 of this year without penalty, 72 percent of Massachusetts residents were still unaware of either deadline as the July 1 deadline approached.  

Massachusetts still has a long way to go to achieve its three-year goal. To start, an estimated 60,000 residents above the 300 percent poverty level, the so-called working poor, are still unable to afford coverage because their incomes are just high enough to disqualify them from the subsidies. The Massachusetts government plans to exempt this group from the individual requirement penalty

More broadly, and perhaps a more troubling trend, young adults in Massachusetts (like their counterparts nationwide) often fail to see the necessity in purchasing health insurance. The state has made a Connector plan available to those between the ages of 19 and 26 that costs anywhere from $106 to $220 per month, but critics say that these plans are unlikely to cover all needed care.

The low enrollment rates of individuals in this generally healthy age bracket detracts from the overall benefit of pooling healthy and unhealthy populations and may lead to premium increases, harming the affordable care initiative.

With health care reform becoming a key domestic issue nationwide, all eyes are on Massachusetts to see if the state’s attempt at universal coverage is a success. But even if it is able to reach its goal of 99 percent over the next three years, the state’s efforts may still not be a good indicator of future success elsewhere because of its starting point. 

First of all, Massachusetts began with a very low uninsured rate of 10 percent, compared to 15 percent nationwide, and thus has fewer individuals to enroll. Contributing to this low rate is the state’s strong foundation of employer-sponsored insurance—nearly 60 percent of the residents of Massachusetts have health coverage through an employer, compared to 54 percent nationally.

Secondly, Massachusetts has a long history of tightly regulating the insurance market. And lastly, Massachusetts had significant amount of funds in an uncompensated care pool that were redirected to support subsidies to low-income individuals—money that most other states do not have.

The next two years will be vital to determine whether the Massachusetts plan will successfully be able to cover everyone, providing valuable information as to what works and what does not. Already, some of the implementation issues that arose such as defining minimum coverage standards and affordability standards foreshadow some of the obstacles that may need to be addressed in national reform efforts.

Massachusetts should be commended, however, for taking steps to increase health insurance coverage for its residents in the face of federal inaction. Even though Massachusetts is unlikely to be a model for other states because of its starting point, the state’s preliminary results illustrate that health reform ultimately needs to be addressed on a national scale.

Strong national leadership is necessary for the implementation of any nationwide effort to provide coverage to the 44.8 million uninsured. The federal government should look to Massachusetts to gain some perspective on how to deal with the growing health care crisis. 

Samantha Hong is a domestic policy intern at the Center for American Progress.

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