On the anniversary of Massachusetts plan to enact universal health insurance, McDonough lauds its early achievements and offers his thoughts on some remaining challenges.
LAST APRIL 12, Massachusetts enacted an ambitious, complex law to expand affordable health insurance to most of the state's half–million uninsured. One year later, how is it going?
Short answer: well and with difficult challenges ahead.
Best news: More than 110,000 formerly uninsured residents have affordable, secure coverage. About 50,000 were covered through expansions to MassHealth, Massachusetts' Medicaid program, and 63,000 through Commonwealth Care, the new subsidized insurance program offered through the Commonwealth Health Insurance Connector Authority, the body established to implement major portions of the new law. None would have coverage today were it not for the law.
Approximately 100,000 others are eligible and unenrolled in Commonwealth Care. Most must pay sliding–scale premiums for coverage. For some, this is no problem. For others, the premiums are unaffordable. The Connector soon will re–evaluate premiums in light of this year's experience.
Mixed news: Uninsured persons with incomes over 300 percent of the federal poverty line ($30,000 for a single person) are ineligible for Commonwealth Care. Beginning July 1, they can purchase unsubsidized coverage through a new program, Commonwealth Choice.
Commonwealth Choice policies will be offered by seven insurers to individuals and small employers. Thanks to intervention by Governor Deval Patrick and the Connector, a variety of new policies with good benefits will be available at costs significantly below what's available today. The low-premium Commonwealth Choice plans, not exclusively, include deductibles and co–insurance higher than the norm in Massachusetts. The plans are age–rated, meaning premiums are lower for 20– and 30–somethings, and higher for 50– and 60–somethings.
Buyers can avoid cost sharing by paying higher premiums, and avoid higher premiums by accepting higher cost sharing. Premiums will be at least 30 percent lower if employers set up "Section 125" plans that allow workers' premiums to be excluded from taxable wages. All employers with 10 or more workers must set up these plans by July 1.
Hopes for magically lower premiums without cost sharing have been brought to earth. It's an earth with lower–cost and higher–quality health insurance for many, not for all.
Challenging news: The law requires all Massachusetts residents to buy health insurance by July 1, 2007; penalties start Dec. 31 at the earliest. Establishing this "individual mandate" necessitates defining a minimum level of health insurance or "minimally creditable coverage." This standard needs to be high enough to assure good coverage because of the mandate. No state or the federal government has ever attempted to do this.
Defining minimally creditable coverage has been controversial because some residents have policies that exclude prescription drugs, and/or include deductibles as high as $10,000 and lifetime benefit caps. Minimally creditable coverage—intended primarily to set a floor for the uninsured—will also set a higher floor for thousands with coverage now. The draft standards, which become fully effective in January 2009, will require policies to include drug coverage, forbid deductibles higher than $2,000 for an individual and $4,000 for a family, and limit lifetime benefit caps.
One thing we have learned is there is no standard that will meet unanimous approval. Any decision is guaranteed to receive criticism from those who think it too strict and others who think it too loose.