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Massachusetts Law Articles

This is Part 2 of 2 about the Massachusetts health care law.


Contents

Also see:

       Part 1 of 2 (“Massachusetts Mandatory Plan”)


The Massachusetts Health Care Reform is Failing
by the Boston Globe

Preliminary comments by a Massachusetts citizen

Here’s a piece that was published on the Boston Globe’s opinion page on March 2. Please pass on to your contacts. It’s practically a first that the Globe actually ran a piece like this after three years of this paper hearing from us, and knowing that this law was failing and harming many since the first year.

Note: Although this is a very good article, it doesn’t mention that those in the subsidized plans cannot afford the premiums, and enrollment was flat from Jan. 1, 08 through Nov. 08 when it began to decrease. Oftentimes, people tend to think that those in subsidized plans are all set. Not the case at all with regard to affordability, no doctors and unsavory Federal regulations among other caveats.

Mass. healthcare reform is failing us
By Susanne L. King | March 2, 2009

MASSACHUSETTS HAS been lauded for its healthcare reform, but the program is a failure. Created solely to achieve universal insurance coverage, the plan does not even begin to address the other essential components of a successful healthcare system.

What would such a system provide? The prestigious Institute of Medicine, part of the National Academy of Sciences, has defined five criteria for healthcare reform. Coverage should be: universal, not tied to a job, affordable for individuals and families, affordable for society, and it should provide access to high-quality care for everyone.

The state’s plan flunks on all counts.

First, it has not achieved universal healthcare, although the reform has been a boon to the private insurance industry. The state has more than 200,000 without coverage, and the count can only go up with rising unemployment.

Second, the reform does not address the problem of insurance being connected to jobs. For individuals, this means their insurance is not continuous if they change or lose jobs. For employers, especially small businesses, health insurance is an expense they can ill afford.

Third, the program is not affordable for many individuals and families. For middle-income people not qualifying for state-subsidized health insurance, costs are too high for even skimpy coverage. For an individual earning $31,213, the cheapest plan can cost $9,872 in premiums and out-of-pocket payments. Low-income residents, previously eligible for free care, have insurance policies requiring unaffordable copayments for office visits and medications.

Fourth, the costs of the reform for the state have been formidable. Spending for the Commonwealth Care subsidized program has doubled, from $630 million in 2007 to an estimated $1.3 billion for 2009, which is not sustainable.

Fifth, reform does not assure access to care. High-deductible plans that have additional out-of-pocket expenses can result in many people not using their insurance when they are sick. In my practice of child and adolescent psychiatry, a parent told me last week that she had a decrease in her job hours, could not afford the $30 copayment for treatment sessions for her adolescent, and decided to meet much less frequently.

In another case, a divorced mother stopped treatment for her son because the father had changed insurance, leaving them with an unaffordable deductible. And at Cambridge Health Alliance, doctors and nurses have cared for patients who, unable to afford the new copayments, were forced to interrupt care for HIV and even cancers that could be treated with chemotherapy.

Access to care is also affected by the uneven distribution of healthcare dollars between primary and specialty care, and between community hospitals and tertiary care hospitals. Partners HealthCare, which includes two major tertiary care hospitals in Boston, was able to negotiate a secret agreement with Blue Cross Blue Shield of Massachusetts to be paid 30 percent more for their services than other providers in the state, contributing to an increase in healthcare costs for Massachusetts, which are already the highest per person in the world. Agreements that tilt spending toward tertiary care threaten the viability of community hospitals and health centers that provide a safety net for the uninsured and underinsured.

There is, though, one US model of healthcare that meets the Institute of Medicine criteria: Medicare. Insuring everyone over 65, Medicare achieves universal coverage and access to care, is not tied to a job, and is affordable for individuals and the country. Medicare simplifies the administration of healthcare dollars, thereby saving money. We need to improve Medicare, and expand this program to include everyone.

A bill before Congress, the United States National Health Insurance Act, would provide more comprehensive coverage for all. The bill includes doctor, hospital, long-term, mental health, dental, and vision care, prescription drugs, and medical supplies, with no premiums, copayments, or deductibles.

People would be free to choose doctors and hospitals, and insurance would not be tied to a job. Costs would be controlled because health planning in a national health program can reestablish needed balance between primary/preventive care and high-tech tertiary care. A modest, progressive tax would replace what people currently pay out of pocket. This program would pay for itself by eliminating the wasteful administrative costs and profits of private insurance companies, and save $8 billion to $10 billion in Massachusetts alone.

We must let Congress know we want improved access to affordable healthcare for all, not more expensive private health insurance we can’t afford to use when we are sick. Massachusetts healthcare reform fails on all five Institute of Medicine criteria. Congress should not make it a model for the nation.

Susanne L. King, M.D., practices in Berkshire County.

Source: Boston Globe op-ed page

[Bolding was added.]



Massachusetts’ Plan: A Failed Model for Health Care Reform
by Physicians for a National Health Program

Prepared by Dr. Rachel Nardin, Assistant Professor of Neurology, Harvard Medical School, with Drs. David Himmelstein and Steffie Woolhandler (both Associate Professors of Medicine, Harvard Medical School) February 18, 2009

Executive Summary

The Massachusetts Health Reform Law of 2006 expanded Medicaid coverage for the poor and made available subsidized, Medicaid-like coverage for additional poor and near-poor residents of the state. It also mandated that middle-income uninsured people either purchase private health insurance or pay a substantial fine ($1,068 in 2009). Smaller fines (up to $295 per employee) were also levied on employers who fail to offer insurance benefits.

The reform law has not achieved universal health insurance coverage, although half or more of the previously uninsured now have some type of insurance policy.

The reform has been more expensive than expected, costing $1.1 billion in fiscal 2008 and $1.3 billion in fiscal 2009. In the face of a state budget crisis in fall 2008, Gov. Deval Patrick announced that he will keep the reform afloat by draining money from safety-net providers such as public hospitals and community clinics.

While the number of people lacking health insurance in Massachusetts has been reduced, several recent surveys demonstrate that substantial problems in access to care remain in the state. While the new health insurance improved access to care for some residents, many low-income patients who previously received completely free care under the state’s old free care program now face co-payments, premiums and deductibles that stop them from getting needed care.

In addition, cuts to safety-net providers have reduced health resources available to the state’s remaining uninsured, as well as to others who rely on safety-net providers for services in short supply in the private sector. These safety-net services include emergency room care, chronic mental health care, and primary care. The net effect of this expensive reform on access to care is at best modest, and for some patients, negative.

By mandating that uninsured residents purchase private health insurance, the law reinforced the economic and political power of health insurance firms. Thus, the reform augments the already high administrative costs of health care. Moreover, the agency that administers the new law (the “Connector”) adds an extra 4 to 5 percentage points to the already high overhead of private health insurance policies.

The reform failed to reduce overreliance on expensive, high-technology services. Indeed, some of its provisions such as changes in Medicaid rates and cuts to safety-net providers (who do more primary care) have further tilted health spending toward expensive, high-technology care.

A single-payer system of non-profit national health insurance could save about $8-$10 billion annually in the state through reduced administrative costs. This money could be used to cover all of the state’s uninsured residents and to improve coverage for those who now have insurance, without any increase in total health care costs.

The Massachusetts reform law is not providing universal access to care, even in a state with highly favorable circumstances, including previously high levels of spending on health care for the poor, high personal incomes, and low rates of uninsurance. It is not a model for the nation.

Report (pdf): Massachusetts’ Plan: A Failed Model for Health Care Reform

Press release: Massachusetts Is No Model for National Health Care Reform

Comment:

By Don McCanne, MD

Those supporting the leading Democratic model for reform frequently cite the Massachusetts plan as an example of how building on our current system of health care financing is the best path to success. Unfortunately, they use selected positive numbers to define success, while ignoring the fact that Massachusetts has failed in its efforts to achieve the real goals of reform. You can understand how pathological the politics of reform has become when they have to dig into the data of a failed reform effort in order to redefine failure as a success.

Let’s look at some of the goals, and how Massachusetts has fared:

  • Everyone should be included - We should quit being dishonest when we say universal, and start demanding that universal means absolutely everyone. The Massachusetts model has left perhaps five percent of individuals without any coverage whatsoever, and there is little likelihood that the numbers of uninsured will be reduced further because of serious flaws in their model.
  • The growth in health care costs must be slowed - The Massachusetts model has been ineffective in addressing the primary causes of excess cost escalation.
  • Health care must be affordable for each individual - Insurance premiums and cost sharing in private plans have remained unaffordable for many in Massachusetts, impairing access to care. Insurmountable debt or personal bankruptcy from medical bills remains a very real threat in Massachusetts.
  • Under-insurance must be eliminated - Massachusetts has expanded the problem of under-insurance in an attempt to make premiums affordable, failing to achieve either goal of adequate plans or affordable premiums.
  • Administrative waste must be reduced - Massachusetts has added complexity to an already complex financing system, significantly increasing the administrative waste in their system.
  • Coverage should be automatic, portable, and permanent - Massachusetts has provided further confirmation that no model built on our dysfunctional financing system can achieve these goals.
  • Health care must be accessible - The Massachusetts model has further exacerbated the deficiencies in the state’s primary care infrastructure, resulting in increased difficulty in accessing their system. Their fragmented financing model has very little capability of realigning resource allocation to improve access.
  • Private intermediaries that waste resources and impair access must be eliminated - But isn’t this what the Massachusetts plan is all about? Their view is that we must use our public agencies and tax funds in an all-out effort to protect the private insurance industry, regardless of the harm to patients in the form of physical suffering and financial hardship.

Suppose Congress and the administration accept the message that the Massachusetts plan is the wrong model for reform. Will they then move forward with a single payer national health program - a model that would actually achieve our goals? It is unlikely, based on all signals emitting from Washington. Instead, they will develop a uniquely American plan designed for Americans.

It will be a plan built on our uniquely American, dysfunctional, fragmented system of financing health care. But it won’t be like the Massachusetts plan that was developed in a wealthy state with greater health care resources, and with fewer financing problems than the rest of the nation. No, it won’t be like Massachusetts. It will be much worse … much, much worse.

Source: Full text is from Dr. Don McCanne’s Quote of the Day (QOTD)


Firms cancel health coverage

With cost rising, small companies turning to (the) state
By Kay Lazar
Globe Staff / July 18, 2010

The relentlessly rising cost of health insurance is prompting some small Massachusetts companies to drop coverage for their workers and encourage them to sign up for state-subsidized care instead, a trend that, some analysts say, could eventually weigh heavily on the state’s already-stressed budget.

Since April 1, the date many insurance contracts are renewed for small businesses, the owners of about 90 small companies terminated their insurance plans with Braintree-based broker Jeff Rich and indicated in a follow-up survey that they were relying on publicly-funded insurance for their employees.

In Sandwich, business consultant Bill Fields said he has been hired by small businesses to enroll about 400 workers in state-subsidized care since April, because the company owners said they could no longer afford to provide coverage. Fields said that is by far the largest number he has handled in such a short time.

“They are giving up out of frustration,’’ Fields said of the employers. “Most of them are very compassionate but they simply can’t afford health insurance any more.’’

Precisely how many small businesses have recently given up offering insurance is hard to pinpoint. The Office of Labor and Workforce Development said the most recent quarterly insurance data collected from small companies has not been compiled.

State officials said they have not seen convincing evidence that there is a trend. There has not been an unusually large spike in enrollment in Commonwealth Care, the subsidized insurance program, according to spokesman Richard Powers. And in any case, Dr. JudyAnn Bigby, secretary of health and human services, said the administration budgeted for higher health care spending because it anticipated that there would be growing numbers of long-term unemployed residents who would be signing up for coverage.

The Massachusetts Division of Health Care Finance and Policy annually surveys employers and found no significant drop in coverage as of the end of 2009, when more than three-quarters of companies offered health insurance.

But insurance brokers say the pace of terminations has picked up considerably since then among small companies, of which there are thousands in Massachusetts. Many of these companies — restaurants, day-care centers, hair salons, and retail shops — typically pay such low wages that their workers qualify for state-subsidized health insurance when their employers drop their plans.

“Those employers are trying to keep their doors open, and to the extent they can cut expenses, they will cut health insurance because they know their people can go to Commonwealth Care,’’ said Mark Gaunya, president of the Massachusetts Association of Health Underwriters, a trade group representing more than 1,000 brokers and other insurance professionals.

The issue is coming to a head as the Patrick administration battles insurers over swiftly escalating rates they have been charging small employers. In February, the governor filed sweeping legislation that proposes to give the Division of Insurance the power to essentially cap health care price increases. That proposal is still pending.

And on April 1, exercising authority the administration had never before used, the division denied 235 of 274 increases proposed by insurers for plans covering individuals and small businesses — base premiums would have increased as much as 32 percent. On July 1, it again held 137 proposed increases to 2009 rates.

The sides have been locked in negotiations for months, with the Patrick administration recently reaching agreement with two insurance carriers on lower rates.

“The Patrick-Murray Administration has taken decisive action to provide small businesses and working families with immediate relief from skyrocketing health insurance premiums,’’ the governor’s press secretary, Juan Martinez, said in a statement. He declined to directly address whether small businesses are increasingly dropping health coverage and directing their workers to subsidized care.

But analysts said the burden of double-digit insurance increases shouldered by small businesses over the last several years is likely to become more of a public problem.

“The more the employer insurance system unravels, the higher the cost is going to be for the state in providing subsidies to low income workers,’’ said Larry Levitt, vice president of the Kaiser Family Foundation, a California-based think tank. “From a state finance perspective, stabilizing employer insurance is definitely important.’’

The state’s landmark 2006 health insurance overhaul included regulations designed to discourage low-wage employees from opting for state health insurance over their companies’ often more pricey coverage. It denied eligibility to any one whose employer had offered him or her coverage in the past six months and paid at least 33 percent toward the individual’s plan.

Most health care advocates and brokers had widely interpreted that to include even workers whose companies had dropped coverage. But recently, some companies that have terminated their group plans have tested those waters and found that their employees were accepted for state-subsidized coverage.

Additionally, company owners say, it has become far cheaper to pay the state penalty for not covering their workers — roughly $295 annually per employee — than to pay thousands more in premiums.

In New Bedford, the Early Learning Child Care center is now paying $1,500 quarterly in fines to the state, instead of the $30,000 it contributed quarterly toward 13 workers’ health insurance premiums. When Executive Director Judy Knox terminated the company’s health plan late last year, she asked Fields, the consultant, to help 10 of those workers enroll in Commonwealth Care. The other three went on spouses’ plans or were eligible for Medicare.

“We had had, in the three previous years, between 17 and 18 percent increases every year,’’ Knox said. “I was so worried about the staff and their coverage, but for most of them, Commonwealth Care seems to be working out very well.’’ The state program covers people with incomes up to 300 percent of the federal poverty level.

Come 2014, when the bulk of the federal health care law goes into effect, the penalties for small companies that do not provide health insurance coverage will be less onerous than those in Massachusetts. That could tempt more small companies to opt out nationally, sending more workers to the public rolls — if health care costs can’t be restrained, some analysts said.

“Struggling business don’t necessarily feel the need to offer coverage to attract workers,’’ said Kaiser’s Levitt.

Massachusetts has not decided whether to adopt the federal rules for small businesses.

The federal law does not impose any penalty on companies with fewer than 50 employees that do not offer coverage, whereas in Massachusetts, employers with more than the equivalent of 11 full-time employees face fines for not offering a health plan and contributing at least 20 percent toward that coverage. But for companies with more than 50 workers, the federal law comes down a lot harder than does the state law.

Source: Boston Globe July 18, 2010



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