Can residents really afford coverage? In August, Boston Globe health reporter Kay Lazar went to Martha’s Vineyard to talk with workers who serve the island’s residents—like the merchants who sometimes work two jobs to help pay their health insurance premiums, which are the highest in the country. Last year, the average family premium in Massachusetts topped $13,788. “It isn’t pretty,” she said. Lazar reported that “some islanders resent being forced to buy coverage.” Michael Hartzband, who owns a general store, told her: “I think it’s good everyone should have health insurance, but to pay a penalty doesn’t seem right.”
After hearing from older readers who complained they were having a tough time with the mandate because they could not afford a policy, Lazar reported on the problems with age rating. Massachusetts may require insurers to cover the sick, but it doesn’t force them to sell affordable policies. Rates for an older person can be twice as much as that for a younger person, requiring them to pay several hundred dollars more.
To fit premiums into tight budgets, some residents have purchased policies with less coverage and more out-of-pocket costs. Some forty-two percent of people buying their policies through the Connector’s shopping service choose policies that generally require more cost sharing. Another irony: State data show that as residents get older they choose cheaper, less comprehensive plans just when they need medical care the most. The Senate Finance Committee draft would allow insurers to charge older people up to five times more than younger people, a provision that will likely mean older people in other states will face the same problems as those in Massachusetts. Will an insurance policy will always give someone a chair in the doctor’s office?
What about cost controls? It’s no secret that Massachusetts’ lack of cost controls, deliberately avoided when reform passed, threatens to undo the law. Ultimately, if the state has no way of paying for subsidies to cover insurance premiums, the law is doomed. Same goes for national reform. Most cost control measures under consideration by Congress and the president are weak or predicated on squeezing savings out of the existing health care order—savings that may or may not materialize.
Massachusetts has now crafted a plan to reduce medical spending by at least $50 billion over the next decade, mostly by scrapping fee-for-service payments to providers in favor of global payments that provide a set amount to cover the cost of care for patients. Aside from sounding like the HMO’s capitation payments of old, draft proposals would give providers five whole years to shift to the new payment methods. What happens in the meantime? The state is looking at interim options, like a set fee for certain procedures.
People I interviewed mentioned the lack of a dedicated funding source, similar to that which exists for Social Security and Medicare, that would pay for the subsidies. Without such a source, financing is always at the whims of politics and competes with other state priorities. As Campaign Desk reported, Philip W. Johnson, chairman of the Blue Cross Blue Shield of Massachusetts Foundation, the organization that laid out the blueprint for reform, has called for such a dedicated tax—an admission that Massachusetts health reform needs a stable source of financing.
It’s not clear there will be a dedicated funding source in the plan Congress passes. It’s way too early to know. Nevertheless, we urge reporters to stay on top of this one, because it will mean the difference between life and death for any health plan politicians try to sell to the American people.