Study: Cost of Mass. health changes evenly distributed

A new study shows the cost of changes to the Massachusetts’ health care system has been borne more or less evenly by employers, individuals and the government, belying claims by critics that public-sector or individuals have been disproportionately burdened.
The study, sponsored by the Blue Cross Blue Shield of Massachusetts Foundation and conducted by researchers at the University of Massachusetts Medical School, found employers and unions, individuals, and the state and federal governments spent about $25.5 billion on health care coverage for Massachusetts residents under 65 in 2007.
That includes insurance premiums, direct payment for services covered either by self-insured private plans or by public programs, and individual cost-sharing (copays and deductibles). It is an increase of $4.7 billion – about 23 percent – over spending in 2005, the study shows.
But the majority of that increase, the researchers found – about 60 percent – wasn’t due to the extra cost of health care system changes, but rather because of medical inflation, rises in premiums and per capita health care spending.
Another 31 percent of the increase was due to more people enrolling in existing private plans and in MassHealth, the state’s Medicaid program (including those made eligible by revisions in that program), the study found.
About 8 percent of the increase is from the introduction of Commonwealth Care, the subsidized private insurance program for low-income people who are ineligible for MassHealth, the study found, and the rest is for the new Fair Share assessment on employers who don’t make a “fair and reasonable” contribution toward the health costs of their workers, and the tax penalty for individuals who don’t get insurance.
When the actual dollars spent by each sector are tallied, the study found, it’s clear that there has been “shared responsibility” for the cost of the revisions. Employers and union benefit funds contributed 48 percent of the cost of coverage in 2007, while individuals contributed 25 percent and government – state and federal – covered 27 percent.
Public spending on health coverage has grown “slightly faster” than that of employers and individuals, the study found, but it’s offset by a sharp decline in government payments for services not covered by insurance.
The study, which is available online, does warn that it is “still very early in the reform era,” and as enrollment in new programs stabilizes, as employer-based coverage “waxes and wanes with economic conditions,” and as health care costs continue to grow, “potential future shifts bear monitoring.”
The complete report is available at www.bcbsmafoundation.org.