June 3, 2008
12:00 a.m. Eastern Time
Uninsurance Rate Among Massachusetts Adults Fell By Almost Half In First Year After Landmark Reforms, Says New Urban Institute Study
Access To Care Improved For Low-Income Adults In Bay State; No Evidence Found That New Coverage Subsidies Are Crowding Out Employer-Sponsored Coverage
Bethesda, MD -- In the first year after Massachusetts implemented its landmark coverage expansion and health reforms, the uninsurance rate among adults in the state dropped by almost half, from 13 percent to 7.1 percent, according to a new Urban Institute study published today as a Health Affairs Web Exclusive. http://content.healthaffairs.org/cgi/content/abstract/hlthaff.27.4.w270
The study also shows that access to care for low-income Massachusetts adults has increased, and the share of adults with high out-of-pocket health care costs and problems paying medical bills has dropped. Study author Sharon Long, a principal research associate at Urban, found no evidence that the Bay State’s expansion of publicly subsidized coverage has “crowded out” employer-sponsored coverage.
Long’s findings are based on two rounds of telephone interviews with randomly selected Massachusetts adults (ages 18-64), in fall 2006 -- just prior to implementation of key elements of the state’s reforms -- and fall 2007. The reforms, enacted in April 2006, included an expansion of the Massachusetts Medicaid program, MassHealth; the creation of new income-related state subsidies for the purchase of health insurance, Commonwealth Care; the creation of a new purchasing arrangement for private health insurance, Commonwealth Choice, via the Commonwealth Connector; an “individual mandate” requiring that state residents purchase “creditable” health insurance if “affordable” coverage is available; a requirement that employers with more than 10 workers either contribute to their employees’ coverage or pay into a state fund; and a consolidation of the individual and small-group private insurance markets.
Long’s study is one of two articles on the Massachusetts experience appearing today on the Health Affairs Web site. In the other paper, John McDonough and coauthors chart the progress of the reforms and the challenges that remain. McDonough is a senior adviser to Sen. Edward Kennedy (D-MA) on national health reform. At the time this article was written, he was executive director of Health Care For All in Boston. http://content.healthaffairs.org/cgi/content/abstract/hlthaff.27.4.w285
Long’s work was supported by the Blue Cross Blue Shield of Massachusetts Foundation, The Commonwealth Fund, and the Robert Wood Johnson Foundation (RWJF). The study by McDonough and coauthors was supported by the W.K. Kellogg Foundation and RWJF.
The Reforms After One Year: Many Successes,
But Challenges Remain In Dealing With High Costs,
Meeting New Demands For Care
Among low-income adults -- those adults in families with incomes less than 300 percent of the federal poverty level, the group eligible for subsidized coverage under Commonwealth Care -- 23.8 percent reported being uninsured in fall 2006, while only 12.9 percent said they lacked coverage in fall 2007, Long reports. Among adults with incomes below 100 percent of poverty, who were eligible for fully subsidized coverage under Commonwealth Care, the uninsurance rate dropped by nearly two-thirds, down to 10 percent in fall 2007.
Other key findings presented by Long include:
-- Increased Access To Care. In fall 2007, 83.1 percent of low-income adults said they had a usual source of medical care -- an important factor in establishing care coordination and continuity -- compared to 79.5 percent in fall 2006. In fall 2007, low-income adults were also more likely to report a dental visit and a visit to a physician for preventive care within the past 12 months than in fall 2006.
-- No Crowd-Out Of Employer Coverage. The share of adults overall and of working adults who reported an offer of employer-sponsored health coverage remained stable between fall 2006 and fall 2007. Indeed, among low-income adults -- the group eligible for subsidized coverage under MassHealth and Commonwealth Care -- employer coverage increased by five percentage points between fall 2006 and fall 2007.
-- Fewer Financial Barriers To Care. In fall 2007, 16.9 percent of low-income adults said that they had not received needed care in the past twelve months because of cost, compared to 27.3 percent in fall 2006. The proportion of low-income adults with more than $500 in out-of-pocket spending dropped from 48.2 percent in fall 2006 to 37.4 percent in fall 2007.
Long describes three major challenges to the continued success of the Massachusetts reforms. First, she notes that costs have exceeded expectations, in part because the number of uninsured adults exceeded initial state projections. Even in the face of these costs, however, 71 percent of adults in Massachusetts voiced support for the reforms in fall 2007.
Second, between fall 2006 and fall 2007, the percentage of low-income adults who did not receive care because of difficulty finding a health care provider went up, from 4.1 percent to 6.9 percent. “Combined with the fact that the Massachusetts reforms did not reduce nonemergency visits to hospital emergency departments, this indicates that the state must ensure that it has a sufficient supply of providers -- particularly primary care providers -- to meet new demands for care, and must help low-income residents navigate the health care system,” Long said.
Finally, Long warns that reaching the remaining uninsured adults in Massachusetts may be difficult. Based on the fall 2007 survey results, these adults tend to be young; male; low-income; and in good, very good, or excellent health. Of the adults still uninsured in fall 2007, 80.1 percent said it would be difficult for them to come up with the funds needed to purchase coverage.
McDonough And Coauthors: Massachusetts’ Experience
Shows The Wisdom Of Delegating Implementation Decisions
And Dealing With Coverage And Costs Separately
Massachusetts has made good progress in implementing its reforms, McDonough and coauthors say. As of April 2008, more than 355,000 state residents had obtained coverage because of the reforms through Commonwealth Care (177,000), MassHealth (55,000), and private coverage (123,000). Key decisions such as determining when coverage would be considered affordable and creditable for the purposes of the individual mandate have been made by the Connector’s ten-member governing board consisting of content experts, constituency representatives, and public officials.
Connector board meetings have frequently been attended by 100 or more observers, including media, and board members have strived to achieve consensus. The Massachusetts experience shows the value of “legislating a clear and not overly prescriptive framework, while delegating tough implementation decisions to a politically credible, expert authority” operating on a strict timetable, say McDonough and his Health Care For All coauthors Brian Rosman, Mehreen Butt, Lindsey Tucker, and Lisa Kaplan Howe.
Like Long, McDonough and coauthors note the higher-than-expected costs of the reforms. They point out that enrollment in MassHealth and Commonwealth Care has been surprisingly high. They also explain that in the bidding process to offer plans through the Connector, two insurers submitted low bids in the first contractual cycle to gain market share, then sought substantial increases for the second contractual cycle beginning in July 2008. Noting that major Massachusetts insurers have implemented average prices increases of 8-12 percent for 2008, McDonough and coauthors say confronting premium increases is “an essential challenge. . . . Continuing increases undermine affordability, expand the number of people who are exempt from the [individual] mandate, and undermine the law’s intent.”
But the authors are optimistic: Despite the cost issue, “the governor, legislative leaders, and stakeholders have repeatedly reiterated support for full implementation,” and indeed the “intense public focus on [the reforms] has helped trigger a public policy imperative in Massachusetts to devise an effective state response to rising costs.” McDonough and coauthors draw this lesson from events in the Bay State: “Like it or not, [the Massachusetts reforms] may show the wisdom of separating the dual priorities of coverage expansion and cost control into distinct legislative enactments.”
Massachusetts’ Medicaid waiver -- which gave the state the flexibility needed to launch its reforms -- expires 30 June 2008. “It is crucial to the financing of the reforms for the Centers for Medicare and Medicaid Services to ease existing enrollment caps and to provide additional revenues to compensate for medical inflation. Massachusetts has shown that states can lead the way on health reform and universal coverage, but they can’t do it alone -- they need a partner in Washington,” McDonough said.
After the embargo lifts, the article by Long will be available online at:
The article by McDonough and coauthors will be available online at:
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