Mass. Makes Huge Dent in Uninsured Population

Massachusetts cut its rate of uninsured adult residents nearly in half during the first year of its near-universal health insurance program, according to a recent survey.

In the first 12 months of the landmark insurance program, which began in fall 2006, the rate of uninsurance among adults in the state dropped by almost half, from 13 percent to 7.1 percent, according to an Urban Institute survey released in June. As of April, more than 355,000 state residents had obtained coverage as a result of the reforms.

The survey found that access to care for low-income adults in particular increased, and the portion of adults with high out-of-pocket health care costs and problems paying medical bills dropped in the first year.

The survey found no evidence that the program has “crowded out” residents, that is, caused low-income earners in employer-sponsored coverage to drop it in favor of a lower-cost and more generous taxpayer-supported alternative. And while many feared that employers would begin dropping health coverage as the new law took effect, that hasn't happened.

The survey found that the share of working adults who were offered employer-sponsored health coverage remained stable between fall 2006 and fall 2007, even though the subset of this group eligible for subsidized coverage could have opted out of employer coverage in favor of a government-subsidized plan.

The survey was based on two rounds of telephone interviews with nearly 3,000 randomly selected Massachusetts adults, one in fall 2006 and the other in fall 2007.

Massachusetts' insurance initiative included an expansion of the state Medicaid program, Masshealth; the creation of income-related state subsidies for the purchase of health insurance, a program known as Commonwealth Care; and establishment of an online insurance-purchasing tool listing insurance policies that provide the minimal standards the state has set for private health insurance, called Commonwealth Choice.

The program also includes a controversial “individual mandate” that requires state residents to purchase health insurance if they can afford coverage. If they fail to do so, they face escalating fines.

Five percent of taxpayers failed to obtain health coverage last year, and more than half of those—about 97,000—were forced to forfeit their $219 personal tax exemption after it was determined they could have afforded health care.

The biggest drop in the number of uninsured residents came from adults with incomes below 100 percent of the federal poverty level who were eligible for fully subsidized coverage under Commonwealth Care, according to the Urban Institute survey. The uninsurance rate among these residents dropped by nearly two-thirds, down to 10 percent by fall 2007.

Advocates of the Massachusetts program praised the finding that 83 percent of low-income adults said they now had a regular source of medical care, up from 80 percent before the program went into effect. This was described by survey author Sharon Long, an economist at the Urban Institute, as an important factor in establishing care coordination and continuity.

“As a result of reform, low-income adults in Massachusetts were more likely to have a place that they usually go to when they are sick or need advice about their health—an important indicator for continuity of care,” she noted.

Among the major challenges the survey identified was the program's rising costs, which are increasing faster than expected, in part because planners underestimated the number of uninsured adults. The legislature estimated when the reforms began that they would cost about $725 million in the fiscal year starting this July, but in recent months the governor said the cost likely will top $869 million.

Another problem is that more state residents are reporting problems finding a health care provider for needed treatment—6.9 percent in fall 2007, up from 4.1 percent a year earlier. This problem points to the likelihood that there is a shortage of health care workers in the state or in some areas of the state.

State officials also have yet to solve the problems caused by the rapidly rising cost of premiums for private insurance plans. For 2008, the cost rose between 8 percent and 12 percent, which undermines affordability, expands the number of people who are exempt from the individual mandate, and threatens the affordability of the entire system.

An abstract of "On The Road To Universal Coverage: Impacts Of Reform In Massachusetts At One Year" is posted at <http://content.healthaffairs.org/cgi/content/abstract/hlthaff.27.4.w270>.▪