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The Implementation of Massachusetts Health Reform

http://masscare.org/ma-health-reform-law/

Congress Looking to Massachusetts for National Health Reform

“Poll Shows Strong Support for MA Health Reform Law: More than two-thirds of Massachusetts residents support two-year-old reform effort” “Massachusetts has expanded coverage to more than three quarters of the state's uninsured.. As a result of the large increase in enrollment, insurance premiums have dropped significantly. At the heart of the Massachusetts reform are two principles: Real help for lower-income families to make coverage more affordable and an innovative insurance ‘connector’ program giving individuals access to high-quality, affordable health insurance.” Mass. Senator Ted Kennedy “The big expansion in coverage has yielded a commensurate drop in the number of ‘free riders,’ those who use hospital emergency rooms and community health centers for routine care that they don’t pay for.” Robert J. Blendon, et al, “Massachusetts Health Reform: A Public Perspective From Debate Through Implementation,” Health Affairs 27, no. 6 (2008): w562 (published online 28 August 2008); Edward M. Kennedy, “Health Care Can’t Wait,” The Washington Post, Sunday, November 9, 2008; Page B07; New York Times editorial, “The Massachusetts Way,” August 30, 2008.

Most Residents of Massachusetts Affected by Health Reform Report it is Hurting Them

Robert J. Blendon, et al, “Massachusetts Health Reform: A Public Perspective From Debate Through Implementation,” Health Affairs 27, no. 6 (2008): w562 (published online 28 August 2008; 10.1377/hlthaff.27.6.w556).

Most Residents of Massachusetts Affected by Health Reform Report Higher Health Care Costs

Newly Subsidized Residents Moved from former Free Care Pool

Free Care Pool

(Uninsured Before Reform Law)

No premiums up to 200% of poverty .

Coinsurance from 200% to 400% of poverty.

No copayments .

Only hospital and health center care, primary care and drug coverage varies.

Direct reimbursement from state to health care providers .

No managed care .

6 month retroactive coverage .

Commonwealth Care

(Uninsured Covered By Reform Law)

No premiums up to 150% of poverty.

Sliding subsidies from 150% to 300% of poverty .

Sliding copayments for all enrollees based on income.

Insurance networks, primary care shortages across state .

Managed Care Organizations (MCOs) as intermediaries.

All plans under managed care.

10 day retroactive coverage.

Mixed Experience of Newly Insured

Kathryn Gabe Jean “Under Free Care I saw doctors at Mass General and Brigham and Women’s hospital. I had no co-payments for medications, appointments, lab tests or hospitalization… Under my Commonwealth Care Plan my routine monthly medical costs include the $110 premium, $200 for medications, a $10 appointment with my primary care doctor, and $20 for a specialist appointment. That’s $340 per month, provided I stay well.” "I’m an actor and got lucky enough to get cast in the commercials for the Health Connector. I quickly signed up for a plan. Having paid $400 bucks a month before; I now only pay $220 a month. Currently, I’m receiving better benefits and have less out of pocket expenses." Jean was unemployed and uninsured after being laid off from her finance administration job. She delayed seeking care for an injured wrist until the pain became unbearable and she had to go to the Emergency Room of a local hospital. The staff at the front-desk handed her a blurry print-out of a form to apply for MassHealth and the Health Safety Net, but it was illegible. Jean went home and waited until she received a bill before contacting the hospital about financial assistance options. Since more than 10 days had passed since she had received treatment, Jean was no longer eligible for Health Safety Net retroactive coverage.

Kathryn’s story collected by Mass-Care; Gabe’s story reported by the Commonwealth Connector; Jean’s story reported by Andrew Cohen and Carol Pryor, “In Debt But Not Indifferent: Chapter 58 and The Access Project’s Medical Debt Resolution Program.”

John Sweeney President, AFL-CIO

Individual Mandates

“Who would have thought that Massachusetts – long considered a bastion of progressive thinking – would take a page out of the Newt Gingrich playbook for health care reform? Forcing uninsured workers to purchase health care coverage or face higher taxes and fines is the cornerstone of Mr. Gingrich’s health care reform proposals. And it is unconscionable that Massachusetts has adopted this misguided individual mandate.”

The Facts

 Individual mandate proposal had no support from any grassroots, health care, or advocacy organization in Massachusetts: only the insurance industry, businesses, and the Heritage Foundation.

  Mandates are a ‘poll tax’ – a fixed dollar amount for each enrollee – making them more regressive than tax-financed programs like Medicaid, Commonwealth Care, or Medicare.

The state requires residents to purchase private insurance, but does not regulate costs, effectively delegating its power of taxation to private corporations.

 Since 60% of health spending is already raised through taxes, mandates require the uninsured to pay twice – the full cost of a plan for themselves, and taxes for public spending on health coverage.

Sweeney quote: “Statement by AFL-CIO President John Sweeney on Massachusetts Health Care Reform,” Press Release, April 5, 2006; Mandates as poll tax: Benjamin Day, “Force-Feeding Health Insurance: Labor and the Push for Individual Mandates,” WorkingUSA , v.10, June 2007, pp. 239-249; 60% of spending:

Crimes and Punishments in Massachusetts

# The Crime The Fine

$50 1 Violation of Child Labor Laws 2 3 Employers Failing to Partially Subsidize a Poor Health Plan for Workers Illegal Sale of Firearms, First Offense 4 Driving Under the Influence, First Offense 5 Domestic Assault 6 Cruelty to or Malicious Killing of Animals 7 Communication of a Terrorist Threat 8 Being Uninsured In Massachusetts* $295 $500 max.

$500 min.

$1000 max.

$1000 min.

~$1000

Individual Mandates in Practice

• The state’s “Affordability Schedule” only includes cost of premiums, not the cost of copayments, deductibles, or coinsurance.

Example

For a 30 year old living in Boston, earning $38,000 a year, a monthly premium of $220 per month ($2,640 per year – 7% of income) is deemed affordable. However, the only plans available under that price range come with $2,000 deductibles, large copayments, and 20% coinsurance after the deductible for hospital stays. • As of December 2008, about 70 percent of enrollees in Commonwealth • Choice (earning too much to qualify for subsidies) had high-deductible plans with high co-payments and coinsurance.

Many people in 2008 have reportedly bought into employer-based health plans instead of applying to the state – there is no data on the quality of coverage this population is receiving.

Data from “Commonwealth Health Insurance Connector Authority Affordability Information Sheet,” 2008; Commonwealth Connector’s online “Find Insurance” tool; and the “Connector Summary Report” for 12/11/08.

Threat to the Safety Net

• Although the percentage of uninsured have reportedly declined by 3/4 th as of 2008, use of the Free Care Pool by uninsured residents has only declined by • 1/3 rd .

Funds previously used for Free Care can now be used for Commonwealth Care, and reimbursements to safety net providers have been slashed • disproportionately to the decline in usage.

Chapter 58 moved Medicaid reimbursement rates towards Medicare’s rates: while these rates are higher overall, they are lower for primary care, which has hit safety net institutions focused on primary care without large tertiary care • operations to offset the losses.

The growth in high-deductible plans has caused a leap in bad debt for some • safety net institutions.

Eligibility for the safety net has been significantly limited and retroactive • coverage dramatically shortened, letting many patients fall through the cracks.

The state’s largest safety net institutions are facing serious budget crises, while large teaching hospitals have posted record surpluses in the past year.

Employers Offering Health Insurance Have Gone Up, but Employees Buying it Have Not

Massachusetts Division of Health Care Finance and Policy, “Health Care in Massachusetts: Key Indicators,” November 2008: p. 33.

Employer Contributions to Health Insurance Continue to Fall

Massachusetts Division of Health Care Finance and Policy, “Massachusetts Employer Survey 2007,” November 2008: p. 22.

Underinsurance Has Increased Under Massachusetts Reform

Massachusetts Division of Health Care Finance and Policy, “Health Care in Massachusetts: Key Indicators,” November 2008: p. 33.

Cost of Massachusetts Health Reform

Commonwealth of Massachusetts Information Statement for Bondholders, August 22, 2008.

Health Reform is Not Sustainable with Rapidly Rising Health Costs

Senate President Therese Murray:

“If we do not constrain healthcare costs, the system we worked so hard to create and implement will collapse.”

Jon Kingsdale, Executive Director, Commonwealth Connector:

“If we have double-digit increases (annually in costs), health reform is not sustainable.”

Minnesota 1992/1993

“Minnesota has set a goal of achieving universal coverage by July 1, 1997. In 1992, the state passed legislation to subsidize premiums for the uninsured and let employers buy coverage from a state pool.” “‘Minnesota is about to embark on a plan to solve the health-insurance crisis that could hold lessons for other states and the nation. It will begin to subsidize coverage for the uninsured. HealthRight will begin signing up families with children in the fall and will be fully open to Minnesota's estimated 370,000 eligible uninsured by 1994.’

Sources: New York Times 9/16/94; and Richard Reece, Medical World News 7/1/1992.

% of Uninsured in Minnesota 1987 - 2005

MinnesotaCare

7.4% 9.1% 9.6%

Oregon 1992

“

Today our dreams of providing effective and affordable health care to all Oregonians has come true.” Gov. Roberts “The most far-reaching health care reform in the nation.”

Sources: Washington Post 6/9/92 and 3/20/`93.

% of Uninsured in Oregon 1987 - 2005

Oregon Health Plan

17.2% 15.3% 18.3%

Tennessee 1992

“The most radical health care plan in America.” “Tennessee will cover at least 95% of its citizens with health insurance by the end of 1994.” Gov. Ned McWherter

Sources: Federal & State Insurance Week 4/12/93; and NY Times 9/16/94

% of Uninsured in Tennessee 1987 - 2005

TennCare

16.6% 15.5% 16.3%

Incremental Reform in Massachusetts

Failed Health Security Act MassHealth Expansion

7.0% 14.3% 9.3% 13.0%