The concept is bold, ambitious and far-reaching: By July 1, 2007, all Massachusetts residents over the age of 18 must carry health insurance if they can afford it, and all employers with 11 or more workers must offer health coverage. Those who don’t comply face financial penalties.
In a single bipartisan measure, the Bay State is trying to reach one of the holy grails of public policy – universal coverage. And on Tuesday, a group that would love to achieve that goal in Rhode Island got a tutorial on the Massachusetts effort.
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The General Assembly’s Joint Committee on Health Care Oversight hosted a discussion with John McDonough, executive director of Massachusetts Health Care for All.
Separately, the committee got a written report from Rhode Island Health Insurance Commissioner Christopher F. Koller that said many aspects of the Massachusetts plan are compatible with reforms being considered here, but others, such as the coverage mandates, should be approached with caution.
Nobody is rushing to copy what the Bay State has done – certainly not this year – and even strong advocates of universal coverage are mostly taking a “wait-and-see” stance, watching how the implementation plays itself out. McDonough didn’t suggest doing otherwise.
He began by noting that this is Massachusetts’ third round of major health care reforms.
In 1992, the state passed a law requiring employers to provide coverage, but it was never implemented, and it was repealed in 1996, when Massachusetts got a Medicaid waiver that allowed it to adopt another major reform, dramatically expanding the MassHealth program.
Under the waiver, Massachusetts also set up a generous reimbursement system for hospitals that served the uninsured, and when the waiver was renewed, effective last July 1, the federal government required the state to redirect the roughly $385 million to help individuals. That, McDonough said, was an “important incentive” to take on major reforms, and it “kept everybody at the table” during difficult negotiations.
The process also was helped along by the fact that both Gov. Mitt Romney and the state Senate leadership had made health insurance reform a priority, McDonough said, and by House Speaker Salvatore DiMasi’s ability to forge a compromise between two radically different proposals.
Romney, a Republican, wanted to require individuals to buy coverage, reflecting the conservative view that health insurance is an individual responsibility. The Democrat-led Senate, for its part, wanted an employer mandate, said McDonough. “DiMasi said, ‘Let’s do both.’ ”
Along with the mandates, the resulting plan expands MassHealth – allowing children in families with incomes up to 300 percent of the federal poverty line to be covered, up from 200 percent, and expanding covered services – and creates new subsidized plans called “Commonwealth Care” for those ineligible for MassHealth, to be offered free to anyone below the poverty line, and with a sliding premium scale for those between 100 and 300 percent of poverty.
The law also merges the Bay State’s individual and small-group health insurance markets, for expected savings of about 24 percent for individuals and premium increases between 3 and 8 percent for small groups, McDonough said. To help everyone find affordable coverage, a new quasi-public “Commonwealth Connector” will evaluate health plans and mediate their sale.
The “Connector” also will handle a key task under the law: defining what’s “affordable,” which McDonough acknowledged is one of the trickiest aspects of the reform. He also acknowledged that there are big questions about financing, though for the first three years, the state has allocated $125 million a year, plus it expects to collect $95 million a year from employers who don’t offer coverage or whose workers continue to rely on charity care.
“There are probably 100 legitimate questions that anyone could ask us,” McDonough told the legislators, “and today we could probably answer 50 of them.”
