Three years ago the Commonwealth of Massachusetts enacted a far-reaching health reform law that politicians and the media hailed as a model for other states and the federal government. That law has become the blueprint for health system change on a national scale, and its advocates have aggressively marketed some variation of the Massachusetts plan as the reform of choice. Until recently, there has been remarkably little analysis of how the law has worked. This is the sixth in an occasional series of posts that will explore the Massachusetts law, with an eye toward helping the press and the public understand the flashpoints as legislation based on the Bay State’s experiment winds its way through Congress. The entire series is archived here.
By now, it should be obvious to everyone that the Massachusetts model was the president’s health reform endgame all along. As articulated last week in his speech to the nation, Obama’s proposal appears to replicate the Massachusetts plan, sans public option. And yet few in the media have taken a good look at the Massachusetts model, and its many shortcomings. With Congress back in session and legislation on the way, now is the time to do so.
The Massachusetts model includes an individual mandate that requires people to carry insurance. The state helps people who can’t afford a policy pay for one. Those with incomes up to 300 percent of the federal poverty level ($66,150 for a family of four and $32,496 for an individual) receive full or partial subsidies. If someone doesn’t qualify for a subsidy, they must purchase insurance on their own. If they want to, they can use the state’s shopping service, called the Connector. Those deemed able to afford a policy must pay a tax penalty if they don’t buy one.
Massachusetts embarked on its reform efforts with several advantages. The state’s number of uninsured residents was lower than most states, and a large percentage of employers offered coverage and still do. Boasting a tradition of strong insurance regulation, the state already required insurers to cover sick people. The state’s Medicaid waiver was up for renewal, and politicians persuaded the federal government to recast the waiver and expand coverage to more poor people.
But recent Census Bureau statistics show that, in 2008, some 352,000 Massachusetts residents did not have coverage, even though the law requires that they do. That’s about 5.5 percent of the state’s population; up from the 2.6 percent who were uninsured in the years after reform took effect. These numbers caused Dr. Steffie Woolhandler, a professor at the Harvard Medical School (and unabashed single-payer advocate), to remark: “Today’s numbers show that plans that require people to buy private insurance don’t work. Obama’s plan to replicate Massachusetts’ reform nationally risks failure on a massive scale.”
The draft bills from the House and the Senate Finance Committee contain many parallels with the Massachusetts law. The y envision making all Americans buy health insurance, and call for penalties if they don’t comply. So we offer a few questions about the Massachusetts law that the press should keep in mind as it starts to report on the national push to copy the Bay State.
Is the state pulling back on the mandate? While the number of uninsured in Massachusetts is lower than other states, the latest rise suggests either that the state is exempting more people from the mandate or that more are taking the tax penalty. The maximum penalty is about $1000 per person, which may be less expensive than buying a policy. In 2007, 60,000 people paid the penalty. The state’s Department of Revenue will release new numbers in early October, but the issue of affordability looms large—perhaps the biggest side effect of reform.