Chapter 58: The Basics of Massachusetts Health Reform John E. Mc. Donough, Dr. PH, MPA Health Care For All (www. hcfa. org) May, 2008
Brief History of MA Health Reform: Continuous Policy Improvement n Eight Key Statutes: 1985 to 2006 n n Three major ones – 1988, 1996, 2006 Continuous Policy Improvement n n n 1988: Universal Health Care Law n n n $1680 Pay or Play Employer Mandate n Delayed three times/Repealed 1996 Common. Health, Student Insurance Mandate, Medical Security Plan, Healthy Start 1996: Chapter 203/Mass. Health Waiver n n n Medicaid/Mass. Health Expansions, 1988, 1996, 1997 Uncompensated Care Pool (now Health Safety Net Trust Fund), 1985, 1988, 1997 Small Group Reform/Nongroup Market Reform, 1991, 1996 Patient Bill of Rights, 2000 Medicaid->Mass. Health; Enrollee growth from 670, 000 (’ 95) to 1, 020, 000 (’ 01) Uninsurance Drop: 680, 000 to 365, 000 Coverage for all children – Children’s Medical Security Plan Senior Pharmacy Program Both reform waves inspired national action n n 1988 Leads to state-based innovations 1996 Leads to Creation of SCHIP
The Power of Incrementalism
Chapter 58 (1) – Insurance Connector, Commonwealth Care & Choice n Commonwealth Health Insurance Connector Authority – 10 member board Three principal responsibilities -n Commonwealth Care (subsidized <300%fpl) n n Subsidized coverage for uninsured with no other options n No premium <150%fpl; sliding scale 150 -300% n fpl; Co-pays Commonwealth Choice (non-subsidized >300%fpl) n Private plans for uninsured >300% fpl and small employers n Define “affordability” for individual mandate and “minimum creditable coverage”
Chapter 58 (2) – Mass. Health Expansions and Restorations n Mass. Health: Kids’ coverage from 200 to 300% fpl ($63 K family of 4) n Mass. Health enrollment caps lifted n Essential, Common. Health, HIV n Optional Benefits Restored: dental, dentures, eyeglasses n New smoking cessation and wellness benefits n $3. 5 M outreach/enrollment grants n $270 M ($90 M per year) hospitals/physicians rate hikes n Pay for Performance/R/E Disparities benchmarks n
Chapter 58 (3) – Individual & Employer Responsibility n Individual Responsibility n n n Beginning 7/1/07, all 18+ must obtain health insurance Penalties if “affordable” coverage available 2007: loss of personal tax exemption if no coverage by 12/31/07 2008: tax penalty= up to $76 per month or $912 per year 2009 and Beyond: to be determined Employer Responsibility n “Fair Share” Employer Contribution n Employers (11+ FTE workers) must pay $295 annually per uncovered worker Employers 11+ must create Section 125 “cafeteria plans” “Free Rider Surcharge” n n Non-offering Employers (11+ workers) with frequent Uncompensated Care Pool users may be charged up to 55% of costs over $50 K No charge on non-offering firms with 125 plans
Chapter 58 (4) – Insurance Market Reforms n Small/Nongroup Insurance Market Reforms Individual market (60 K lives) merged with small group market (750 K lives) on 7/1/07 – dramatic premium reductions n Young adults (19 -25) can stay on parents’ plans for two years n Young Adult Plans for 19 -26 year olds n n Other Reforms n Quality and Cost Council n n n Sets cost and quality benchmarks; Produces website Racial/Ethnic Health Disparities Council Computerized Prescription Order Entry – $5 million
How Did It Happen? Key Players n Blue Cross Blue Shield Access Foundation n Gov. Mitt Romney Advocacy Community n n n Patients/Consumers, Providers, Labor, Business Leaders Affordable Care Today Coalition (ACT!) – legislative coalition Ballot Initiative Committee (Mass. ACT!) – 120, 000 citizen signatures Senate President Robert Travaglini + Senate House Speaker Sal Di. Masi + House *** Federal Government – 1115 Medicaid Waiver n n n Roadmap to Coverage Initiative/Urban Institute $385 M supplemental payments at risk Breaking the “Altman Rule” – Status Quo was not an option Business Groups
Insurance Market Reforms Individual Mandate Connector Affordable Products Employer Responsibility Commonwealth Care Medicaid Expansions Medicare Medicaid Developed by Nancy Turnbull, Harvard School of Public Health Employer Coverage Young Adult Products
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