How Successful Is Mass. Insurance Reform Effort?

Two years after the Massachusetts health care financing system was signed into law, its supporters say it has had enough success to provide important guideposts for other states considering expanded health care access, if not a national health financing program.

The law, known as Chapter 58, was enacted in spring 2006 and has rolled out additional features—such as penalties for failure to obtain individual insurance—since then. The goal of the program was to reduce the number of uninsured in the state as much as possible below the 10 percent of the state's population that was then uninsured.

Supporters say the program has gone “reasonably well,” with 340,000 newly insured as of January 1, which is about 70 percent of the adult uninsured population, according to John Kingsdale, executive director of the Commonwealth Health Insurance Connector Authority. Kingsdale and other policy experts with knowledge of the program discussed it during a meeting with congressional staff in May.

The expansion in insurance coverage included about 110,000 individuals newly insured by commercial private insurance plans that are unsubsidized by the state. Among the keys to that growth were changes in the“ nongroup,” or individual, insurance market to require virtually the same coverage terms as are common in the group-insurance market and the same guaranteed policy renewal—so benefits cannot be cancelled at the first occurrence of major illness.

“In Massachusetts, we have actually been able to make this nongroup market...function,” Kingsdale said.

Other accomplishments include reductions in the number of people seeking free care at the state's “safety net” hospitals and reductions in the amount spent on such care by most hospitals. In the last two years, for example, spending on free care at Brigham and Women's and Massachusetts General hospitals dropped by 17 percent.

The new system also has encouraged broad employer participation in providing health insurance for their workers. The law included an annual penalty of $295 per worker for businesses with 11 or more employees who did not contribute to health coverage for their workers. The approach has resulted in 72 percent of Massachusetts employers providing insurance, as opposed to 60 percent nationally, according to Kingsdale. Similar drops in free care were seen at the state's community health centers.

The new law also expanded Massachusetts' State Children's Health Insurance Program (SCHIP)—a state and federal partnership that provides health coverage for children in low-income families—to include children from families with incomes of up to 300 percent of the federal poverty level. The change raised eligibility for the free insurance to include minors from families with incomes of up to nearly $64,000 for a family of four, for example.

About 175,000 low- and moderate-income adults received coverage through Commonwealth Care, the new state program that offers free or heavily subsidized coverage for people with incomes up to three times the federal poverty level. In addition, the state expanded Medicaid eligibility and added about 7,000 new Medicaid enrollees.

Another accomplishment of the law was the establishment of a new state entity called the Connector, which provides an online menu of available private health insurance plans that meet basic standards set by the state. The Web site allows individual insurance customers to perform“ apples-to-apples” comparisons of the major insurance plans available and purchase them through the Web site. This feature “is thoroughly radical and unprecedented, believe it or not, in terms of what you have to go through as a consumer to get health insurance,” said John McDonough, executive director of Healthcare for All, a consumer advocacy group in Massachusetts.