Amidst all the debate about the merits of the Massachusetts health reform law, it is easy to forget that its accomplishments have been nothing short of spectacular. A study authored by Sharon Long of the Urban Institute showed a fifty percent reduction in the number of residents without health insurance. Along with coverage came improved access to health care and a reduced financial burden associated with receiving care. These results were generated in just one year.

I can think of only two other state-level reforms that have had similarly dramatic effects. The first was Hawaii’s employer mandate, enacted in the mid-1970s with implementation delayed until the 1980s due to legal challenges. Under the Hawaii law, employers are required to provide health insurance coverage to their employees, but not their dependents. For more than a decade after enactment of the mandate, Hawaii had one of the lowest rates of uninsurance in the country. The second was Tenncare, implemented in 1994, which vaulted Tennessee from high levels of uninsurance typical of southern states to one of the lowest rates in the country.

Hawaii and Tennessee have lost their places of leadership in health insurance coverage. The Hawaii mandate is frozen in time due to federal law, making modifications that are more appropriate to the 21st century impossible. Tenncare has been dismantled and the number of uninsured in the state has grown.

Others draw the lesson from these two states and others that state-based reform is doomed to fail. While I would be the first to say that there are limits to what states can accomplish, it seems more valuable to seek to learn from the lessons of Hawaii and Tennessee. Read more…

The end of July may have marked the end of the Legislature’s formal sessions for 2007-2008, but it did not mark the end of our work for the year. In this and other public forums, discussion and analysis of the health reform law enacted in 2006 continues, as it should. The Legislature and the Patrick Administration have ongoing responsibilities and duties to health reform, and that work continues, too. The blueprint established by Chapter 58 is being followed and built upon by the Legislature, most recently through Chapter 305 of the Acts of 2008, “An Act to Promote Cost Containment, Transparency, and Efficiency in the Delivery of Quality Health Care.”

Chapter 305 makes good on the promise for sustainable health reform, by establishing policy priorities for containing health care costs, increasing transparency of what we get for our well spent health care dollars, and improving quality and creating efficiencies in our health care delivery system.

The new law puts in place provisions for a statewide system of secure and accurate electronic medical records, and a special commission on payment reform charged with making recommendations to the Legislature for incentives and payments to providers that encourage delivery of appropriate and coordinated care, with improved patient outcomes.

The new law also provides incentives for new medical school graduates to practice primary care here, where they are trained. Read more…

Social science experiments show that we humans, absent conscious contemplation, gravitate toward a reflexive belief that the world is just. Psychologists call it the “Just World” hypothesis, or theory, and have demonstrated its pervasive influence. The “just world” theory attempts to explain this powerful human bias and its connection to the moral judgments we make in response to another’s misfortune. In the “Just World”, bad things only happen to bad people and good things only happen to good people. So, be good and you will be safe. Perhaps we need to believe the world is just to avoid that other menace of human psychology – cognitive dissonance. What shall we do if being good is no insurance against misfortune? What kind of world do we inhabit that bad things happen to good people and good things are given to bad people? A corollary of the “Just World” theory, however, is more insidious: — If bad things happen to you, you must be a bad person; if good things happen to you, you must be a good person. I worry that this easy logic of the psyche may often undermine support for community solutions to suffering and collective responsibility for risk. Combined with our national history and cultural bias toward individualism and personal responsibility, it may make for a self-centered brew indeed.

In a blink, we delineate between the “deserving” and the “undeserving” poor. Do we now believe in the deserving and the undeserving sick? Sickness is brought on by poor lifestyle choices, right? Good health behavior - healthy “lifestyles” - will avoid it. If I am healthy – live healthy - why should I pay for the sick? If you get sick, you must have made bad choices. Make good choices and you will be healthy. Be good and you will be safe… Read more…

Word leaked out this week that Massachusetts’ negotiations with the Bush administration over renewing the state’s Medicaid waiver – the agreement under which the federal government provides matching funds for our Medicaid program as well as the new health law – are not going swimmingly. With federal officials seeking to slash some $2 billion worth of health spending from the state’s proposed budget, the already fiscally troubled health reform experiment in Massachusetts may be on even more tenuous ground in the coming years.

However, historians of health reform will receive this news with a distinct sense of déjà vu. The Massachusetts reform law, passed in 2006, is often described as a ‘first-in-the-nation’ effort, and is billed as a universal or near-universal measure. Upon passage, the New York Times claimed that “The bill does what health experts say no other state has been able to do: provide a mechanism for all of its citizens to obtain health insurance.” Then Senate President Robert Travaglini claimed that “the biggest victory is for the people of Massachusetts, who will now have equal access to the most renowned healthcare in the world.” These were significant promises to Massachusetts residents, and significant promises for the nation. Fast forward just one year later and the math behind the promise of universal health care is looking fuzzy. Read more…

The administration’s decision to revise the employer “fair share” formula is breathtakingly shortsighted for a host of reasons. They’re fighting the wrong battle against the wrong enemy at the wrong time, and, in the process, endangering the broad coalition that has been critical to the success of health reform.

Contrary to the claims of advocates, the current fair share regulations reflect the carefully crafted compromise that broke the logjam and led to passage of the landmark legislation in 2006. The administration’s rationale for blowing open this hard-earned agreement is that employers aren’t paying their fair share. Let’s look at the facts.

It’s true that people with state-subsidized insurance are paying higher out-of-pocket costs this year - up to $25 million in the aggregate - but the increased price tag for the business community is far more. Not only are Massachusetts employers paying an additional $500 million to cover 85,000 previously uninsured employees and their dependents, but the $35 million being transferred from the Medical Security Trust is paid by employers, and $100 million of the $300 million in new corporate taxes will fund state health-care spending.

The ultimate irony is that the state’s increased assessments on employers, insurers, and providers may be covering a “shortfall” that does not exist. Read more…

The Massachusetts health reform was a distinct departure from previous reform strategies. The two most significant pieces of the approach were a set of insurance market reforms and a set of public financing reforms.

The insurance reforms were designed to make coverage easier to obtain and portable from job to job. The public program reforms redirected subsidies paid to safety net hospitals for treating the uninsured into subsidies to help the low-income uninsured buy health insurance.

The results of the first two years of implementation of both these key elements have been broadly positive.

Approximately 350,000 Massachusetts residents, or roughly half the state’s estimated uninsured, have obtained coverage, and there has been a significant decline in taxpayer subsidized “free care”.

While, to date, both of these key elements have shown progress, challenges remain as their implementation continues.

It is significant that of the 350,000 newly coverage individuals, approximately 110,000 have obtained coverage on their own without any public subsidy. However, only 18,000 have obtained coverage through the newly created Connector. Read more…

When Massachusetts passed its new health care law, the plan was hailed as a potential model for the nation. But as we see it in action, it becomes increasingly clear that the plan does not live up to the hype.

* Slightly less than half of Massachusetts’ uninsured population actually complied with the mandate. True, the number of people without health insurance was reduced from 13% of the state’s population to 7%, but when the bill was passed, advocates promised that “all Massachusetts citizens will have health insurance.” Of course health care reform should not be judged solely by whether it achieves universal coverage, but it is fair to judge a plan by its advocates’ criteria.

* Most of those who are signing up are low-income individuals, whose coverage is fully or partially subsidized, proving once again that if you give something away for free people will take it. It certainly appears that it is the expensive and generous Massachusetts subsidies, not the unprecedented individual mandate that is responsible for much of the increased coverage.

* Adverse selection remains a big problem, with the young and healthy failing to comply with the mandate. The state refused to change its community rating laws which drive up the cost of insurance for young, healthy individuals. Not surprisingly, they don’t find this a good deal.

* The program is far exceeding its projected costs, with at least a $128 million budget overrun in its first year. Read more…

As a former state cabinet officer in a big state and as a transplanted Californian who still calls Massachusetts home, I have nothing but admiration for what the Bay State has done in putting together its health reform plan. Some are quick to point out that Massachusetts had a more modest uninsured problem than other states and Federal Medicaid money to play with that many other states don’t have. True enough. The potential loss of $385 million in federal funds can bring remarkable focus. But viewed from a national perspective, Massachusetts has shown that it is possible to break through the ideological and policy logjam between Left and Right that has prevented action on health reform nationally for so many years. Massachusetts did this by assembling a broad-based coalition and putting together a plan that gave all sides at least something they could like about our fragmented health system; it built on public programs, the employer-based system, and insurance purchased in the non-group market by individuals, and it improved payment levels for providers.

In many ways, Massachusetts’ weaknesses come from its strengths. The plan does not satisfy purists on the Left or the Right, precisely because it represents an amalgam approach; it is not single payer nor is it a pure market approach. The plan does not cover everyone because pragmatic decisions were made to overcome implementation obstacles rather than let the plan blow up. Two percent of the state’s total population and approximately 20 percent of the uninsured population has been exempted from the mandate to have insurance because these people could not afford it.

A few key health policy lessons have also emerged from Massachusetts. Read more…

The state’s health coverage law says companies must make a fair and reasonable contribution to employee health coverage or pay a yearly $295 fine for each worker. The current definition of fair and reasonable is:

1) enrolling at least 25% of full time workers in a company health plan
or
2) offering to pay at least 33% of the premium for full time workers

The Patrick administration is proposing to change the “or” to “and.” Health and Human Services Secretary JudyAnn Bigby says the change will bring in closer to the $45 million the employer fine was expected to raise when the law passed.

“We’ve only collected between 6 and 7 million dollars and we think the way the rule was implemented didn’t take into account that this was not a reasonable test.”

Associated Industries of Massachusetts President Rick Lord counters with three arguments.

“There really was no analysis to support that ($45 million) number. This was never supposed to be a significant component of financing for health reform; and employers in Massachusetts are already paying their fair share.”

Retailers Association of Massachusetts President Jon Hurst says the change would backfire. Read more…

Editorial note: This week we will hear from national health policy experts who are tracking the Massachusetts health coverage law.

As the country prepares for a new administration that will have a unique opportunity to improve access to health care for all Americans, it’s important for the nation to look closely at the effects of the historic Massachusetts health reform law. It’s clear that the law has already had a major impact, halving the uninsured rate among working-age adults in the state in its first year. A Commonwealth Fund-supported evaluation published in Health Affairs also found that low-income adults reported better access to care, such as more preventive care visits, and lower out-of-pocket spending on health care. Additionally, the new public coverage did not lead to “crowd out,” where employers drop coverage or employees opt for public coverage over employer coverage.

A national approach to universal coverage should incorporate the core elements of the Massachusetts plan. Like the Massachusetts law, the Building Blocks framework my Fund colleagues and I described in another recent Health Affairs article calls for expanding public coverage while maintaining the current role of employer-sponsored insurance. It also includes a new national insurance connector—similar to the subsidized Commonwealth Care and unsubsidized Commonwealth Choice —that would provide a selection of insurance plans for the uninsured, small businesses and the self-employed. We also recommend implementing an insurance mandate, as Massachusetts has done.

As highlighted in a recent issue of the Commonwealth Fund newsletter States in Action, moving forward, Massachusetts will need to consider how to best to enforce its mandate and ensure coverage is affordable. To that end, it will be critical to ensure the plan has sustainable financing.

Karen Davis, President, The Commonwealth Fund