An Update on Massachusetts Health Reform
June 18, 2009
presentation      get QuickTime

The lessons of Massachusetts health reform effects were presented to participants at a recent forum by Michael Doonan, Ph.D., of the Massachusetts Health Policy Forum.

Of course, Massachusetts initiated in 2004 a movement to ensure health insurance coverage for every resident of the state.  The state envisioned a model in which individuals, employers, and government would share responsibility for shifting from a “safety net” system to a health and wellness approach.  The Massachusetts model includes several important components:

• Individuals are mandated to purchase health insurance, based on their ability to pay
• Policyholders must maintain the “minimum creditable coverage,” which contains prescription coverage, out-of-pocket caps, and no limits on a per year or per sickness basis
• Affordable coverage options are available through state subsidies
• Employer participation.  Penalties for those who don’t participate
• Enforcement of insurance mandate compliance and penalties for those who are not in compliance
• Expanded government responsibility in the form of Medicaid, the “Commonwealth Care Health Insurance Program,” insurance reform, the establishment of a “Cost and Quality Commission,” and the establishment of a “Health Care Connector” to oversee the system
• A selection of high-value insurance plans from the state’s “Commonwealth Choice” program

In its second year of implementation, Massachusetts now has 97.4% of its residents insured, the lowest rate of uninsured in the United States. “The Massachusetts plan gets insurance for those who don’t have it,” Doonan told the nearly 200 people attending the program at Franklin University in Columbus.  “A mandate captures many people who otherwise wouldn’t get insurance.” 

Although the Massachusetts plan has been perceived by some to be financially unsustainable, Doonan said it remains a viable plan.  “A mandate brings healthy people into the risk pool,” he said.  “Their participation lowers the overall risk and improves the premium rate.” ;Doonan said there was concern initially that employers might elect to drop coverage for their employees.  “But they didn’t,” he said.  “And, because people were mandated to have insurance, many who hadn’t had it went to their employer to get it.  In fact, 36% of newly-insured Massachusetts residents obtained their coverage through employer plans.  So, that employer-based coverage became a very important benefit for employees.  And employers realized it’s an excellent recruitment and retention tool, as well as a worthwhile investment.”

Of course, increased coverage through employer-based plans is not an expense to the state.

In the process, providers were able to generate more revenue because more people have insurance.

Doonan acknowledged that challenges remain.  “We have a serious shortage of providers,” he said.  “Virtually everyone has insurance now, but not everyone can get into a doctor.”  More residents (up to 24% in 2008 compared to 16% in 2007) had trouble obtaining necessary care.  “Physicians are clustered in urban areas,” Doonan said.  “We need to train and recruit more physicians.”

“We had a major change in coverage but didn’t increase the number of providers,” he said.  “About 35% of doctors are not accepting new patients.”

Approximately 18% of Massachusetts residents indicate difficulty paying medical bills, according to a recent survey.  Eleven percent said they have unmet medical needs due to concerns about cost.  “Medical costs have been a big reason for personal bankruptcy,” Doonan said.  “Consumer costs are still a major problem.”

Doonan said Massachusetts is working on revisions to its program, including updating and simplifying plan options, and improving its outreach.

He also said that Massachusetts’ plan demonstrated that offering coverage can drive discussions regarding costs, quality, and access to care.  And, although, “health insurance is critical for sick people, it’s not everything,” Doonan said.  “We need a solid public health system, health education, wellness programs, exercise, availability of fresh produce, and safe neighborhoods where people can walk and play.”