The New Health Dialogue

Here at the New Health Dialogue we like to highlight reform at the state level because they serve as "laboratories of democracy." One such laboratory, Massachusetts, is succeeding in its efforts to ensure access to affordable health insurance for all Massachusetts residents.

Most recently, Governor Patrick and the Health Care Finance and Policy Division of the state government put out a report on key indicators of health care in Massachusetts. And, almost all of the indicators point to good news.

• As of March 2008, there were as many as 439,000 newly insured Massachusetts residents (excluding new Medicare beneficiaries). This is a 70% reduction in the number of uninsured Massachusetts residents.
• Nearly half of the newly insured gained private coverage either through their employer (159,000 people) or through individual purchase of health insurance (32,000 people).
• The other half gained coverage through a state-subsidized plan (176,000 in Commonwealth Care and 72,000 in MassHealth).
• Payments for care delivered through the Health Safety Net (money paid to hospitals on behalf of the uninsured) dropped by $68 million, a significant savings for a state looking for financing.

So while it is true that health reform has cost more than legislators originally estimated, the good news about expansion in coverage should help balance the state's concerns about funding. Additionally, it is important to remember why the cost of the Massachusetts health reform law is higher than expected. Let's consider a couple of important factors:

1. Number of Uninsured: Massachusetts officials estimated that between 140,000 and 160,000 individuals would enroll in subsidized coverage, but closer to 180,000 enrolled. This underestimate is a result of a survey that not only under-counted the number of uninsured in Massachusetts, but also drastically underestimated the number of uninsured residents who were low-income.
2. Claims Experience of Subsidized Enrollees: Individuals who enrolled in subsidized coverage were older and sicker than the state and insurance companies expected, making their care more expensive.

So, as Massachusetts legislators, businesses, and consumers continue to negotiate over sources of funding for the future of their landmark program, we applaud the success of their continuing experiment.