Mass. Health Care Reform One-Year Later: Clear Successes and Challenges Emerge

One year after implementation, Massachusetts new health care law has dramatically reduced its rate of the uninsured by half, increasing coverage in both the public and private sectors for 355,000 previously uninsured residents, a new Urban Institute study published in Health Affairs shows. The state has improved access to coverage but rising costs are a key challenge as the state moves forward.

Despite fears that state-funded programs would "crowd out" private coverage, employer-based coverage has actually increased 3%, compared to national trends showing a continued decline in employer-based coverage, as reported by the New York Times. Between expanded private and public coverage, out-of-pocket expenses for all adults dropped, as did the number of adults who said they had difficulty paying medical bills, while more people received routine preventive care.

Before the law went into effect, roughly 600,000 residents lacked coverage. Of those, 355,000 now have coverage, according to the Urban Institute study, reducing the uninsured rate to 7%. 62,000 residents were exempted from the controversial individual mandate contained in the law because they did not earn enough money and 97,000 residents decided to forgo their personal tax exemption, valued at $219, than pay for coverage. This penalty will increase to $912 for individuals who remain uninsured throughout the year.

Key elements of the 2006 reform act included:

  • requiring all residents to have health care coverage
  • imposing a modest fee on employers that do not provide coverage
  • establishing several measures to help residents afford insurance.
  • creating the Commonwealth Connector to negotiate and contract with private insurers to bring more affordable insurance options to market for individuals and small businesses.
  • combining small group and individual markets, resulting in a projected 15% decrease in individual premiums.
  • creating Commonwealth Care, a program offering subsidized coverage to adults ineligible for Medicaid with incomes up to 300% of poverty, and Commonwealth Choice, a similar program that offers non-subsidized health plans to individuals, documented immigrants, families and small businesses. Both Commonwealth programs are administered by the Connector.

In a companion Health Affairs article, Health Care for All-Massachusetts reports on the key achievements made by the reform in addition to the increased access to health care - combining the individual and small group markets, establishing the Connector, etc. - and maintains that containing public and private health care costs is the next major push for reform in the state.

Overall, Massachusetts residents support the reform law, although only 44% of residents who did not previously have coverage support it -- reflecting dislike of the individual mandate aspect of the law and the associated tax penalties for lacking coverage. Meanwhile, 71% of previously insured residents support the reforms.

Future challenges: Despite the gains in coverage, the state faces clear challenges, including:

  • Rising costs - Insurers are raising premiums an average 8% to 12%, tax penalties for non-compliance will increase from $219 to a potential $912 for individuals, and the state share for subsidies is coming in $150 million more than earlier estimates.
  • Signs of a provider shortage - Despite more residents saying they are getting needed care, more said they had a hard time finding a doctor, particularly primary care doctors .
  • No change in emergency room visits - Anecdotal reports that some previously uninsured residents are still visiting ER rooms despite having primary care coverage, a habit state officials are looking to change.

The road ahead for Massachusetts will be far from easy. Achieving affordability for all residents remains the chief goal as well as the chief challenge. Getting there will depend on the state's ability to tackle the underlying growth of health care costs, which outstrip wages and the rate of inflation roughly three to one. This year, lawmakers are advancing a package of reforms to contain costs and improve quality of care (SB 2660). Measures include a statewide electronic medical records system, enhanced transparency of health care costs, and several measures to reduce prescription drug costs, including a pharmaceutical company ban on gifts to doctors and a pharmacy academic detailing program.

Kaiser Family Foundation - Summary of Press Coverage of Urban Institute Report
Urban Institute, Health Affairs - On the Road to Universal Coverage: Impacts of Reform in Massachusetts at One Year
Health Care for All-MA, Health Affairs - Massachusetts Health Reform Implementation: Major Progress and Future Challenges