Costs Pose Challenge To Massachusetts Health Insurance Law One Year After Deadline For Residents To Obtain Coverage

Main Category: Health Insurance / Medical Insurance
Article Date: 01 Jul 2008 - 5:00 PDT

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One year after the deadline for Massachusetts residents to obtain health coverage under the state's health insurance law, the percentage of uninsured has declined but the law "still faces a huge challenge: costs," USA Today reports. The law requires most state residents to obtain health coverage or face a tax penalty. Since the law was enacted in 2006, the percentage of uninsured Massachusetts adults has decreased from 13% to 7%, according to studies cited by the state. An April study published in the journal Health Affairs found that there are 355,000 newly insured residents in the state. Figures from January show that of the newly insured, 37% are eligible for fully subsidized coverage, 17% are enrolled in an expanded Medicaid program, 14% pay a portion of their coverage, 7% have purchased private coverage without a subsidy and 25% are enrolled in their employer-sponsored plans.

The law was expected to cost about $472 million in the first year, but because of higher-than-expected enrollment in government-sponsored programs, the actual cost was $625 million, according to figures from the Massachusetts Health Insurance Connector Authority. Gov. Deval Patrick (D) has requested $869 million for the program for fiscal year 2009, compared with previous estimates of $725 million.

Costs also have increased for residents. Monthly premiums for partially subsidized coverage increased by an average of 9.4% going into the second year of the program, according to state figures. Premiums for people purchasing private coverage without a subsidy increased by an average of 5.1%.

Jon Kingsdale, executive director of the Connector, said the state's first priority was to expand coverage, and then later address costs. He said, "The way to do this is to make the moral commitment to cover everybody" because it forces "the political leadership, doctors, hospitals and health insurers to grapple with how to make this affordable. I don't know any other way to get America to confront this very tough problem." Kingsdale added that state lawmakers are considering legislation that aims to reduce health care costs through a variety of measures, including increased use of electronic health records.

According to USA Today, as the presidential candidates debate their health care proposals, the Massachusetts health insurance law "is both touted as an example to copy nationally and criticized as a model to avoid." Kaiser Family Foundation President and CEO Drew Altman said, "Some will say it's an overwhelming success story. Others will say it has cost somewhat more than expected, so we can't afford to expand coverage," adding, "The truth is somewhere in the middle" (Appleby, USA Today, 6/30).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation.

© 2008 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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