Massachusetts Plan is a Mess

The Massachusetts “Universal Healthcare” program planned to take away residents’ $219 personal tax exemption if they did not buy private insurance this year, and fine them half the cost of the cheapest health plan, at least $1,200, in the following year.  But the State has acknowledged that it cannot work, and has dropped the requirement for the poorest 20% of the population.  Meanwhile, the population is going without the healthcare they need and the insurance industry is making a killing.

There is no cap on insurance premiums. The cheapest plan where most people live is $2,100 a year for residents in their mid-30s and over $6,000 for those over age 55. These are rates for stripped-down plans with out-of-pocket yearly deductibles of $2,000 per individual and $4,000 per family before insurance kicks in. 37% of Massachusetts households with 300-500% poverty level income cannot afford even $200/month premiums plus other expenses.

Residents with income less than 300 percent of poverty level are supposed to receive state subsidies for premiums, funded by penalties assessed to employers not offering health coverage.  These “fair share” penalties are supposed to be $295 per employee per YEAR.  As of May 10, employers have not contributed a penny into this fund, which was supposed to collect $95 million to defray premium subsidy expenses.  Employers can get out of paying this penalty by merely covering one of four employees, or paying a third of employees’ premium costs, no matter how bad the plan.

The Massachusetts plan is driven by Washington’s plan to strip tens of billions of dollars from Medicare, and particularly Medicaid, over the next five years, in anticipation of 70 million new retirees with increased life spans and chronic disease.  Medicaid, the health program for low-income people, and which  covers 2/3 of long-term care for seniors and disabled people and covers some 40% of births, is equally funded by the states and the federal government.  Under the “Affordable Choices Initiative,” as states’ contracts with Washington expire, Washington is cutting back funding for the safety-net hospitals and clinics that deliver care to Medicaid patients, and states can recover funds only by using them to subsidize private insurance for Medicaid recipients.  Massachusetts shows what a disaster this plan is.

The only true reform for the US health disaster is elimination of private health insurance that take 25 to 40 percent of health money, replacing it with a government-run single-payer mechanism to pay for medical care. This is the basis of US Rep. Conyer’s HR 676 plan and California Senator Kuehl’s SB 840 plan.

Universal Health Care Gets A Chance
Massachusetts Plan Under a Microscope

By Christopher Lee
Washington Post Staff Writer
Sunday, July 1, 2007; A01

BOSTON — There is a lot of talk about overhauling health care in the United States, but Massachusetts is actually trying to do it — again.

Today, the home of some of the nation’s most prestigious hospitals and medical schools becomes the first state in the nation to require its 6.5 million residents to have health insurance or face financial penalties. Making insurance mandatory — and more affordable — is the centerpiece of a law approved by the legislature last year that civic and business leaders hope will dramatically reduce the ranks of the state’s 400,000 uninsured and the number of people who seek costly “uncompensated” care in hospital emergency rooms.

This is not the first time the state has attempted to tackle the problem. Nearly 20 years ago, then-Gov. Michael S. Dukakis signed universal health-care legislation that was supposed to bring coverage to everyone by 1992. But the law’s requirement that employers provide coverage to workers or pay a tax proved unpopular, and it was never implemented.

Still, Massachusetts’s new grand experiment could become a model for major changes in health care across the country — if it works.

Already Democratic presidential candidates are borrowing some of its elements for their campaign platforms, Gov. Arnold Schwarzenegger (R) is pushing a similar plan in California, and other states are watching closely.

President Bush signaled last week that state experiments such as Massachusetts’s will play a key role in remaking a U.S. health-care system that he described as too costly, too confusing and leaving too many people uninsured.

“States should make reforms to ensure that their citizens have access to basic private health insurance,” Bush said after meeting with health-care experts at the White House. “If we want a better system, the federal government has got a responsibility to reform, and so do states. . . . The choices we make now will set the direction of medical care in America for years to come.”

Their place in the national spotlight is not lost on the Massachusetts officials, business leaders and consumer advocates who forged an unlikely alliance to get the law passed in April of last year. They know that would-be reformers around the country are hoping that they will succeed, and that skeptics were quick to cluck over early reports this spring that the new state-facilitated insurance plans might be unaffordable for average citizens.

“They might like to imitate us, some of them, but a lot of them can’t wait for us to fail,” said Jon Kingsdale, executive director of the Commonwealth Health Insurance Connector Authority, the new state entity implementing the law. “It’s actually very helpful pressure, because people in Massachusetts feel the pressure of the national eyes on us, so they are particularly concerned that this not fail. It actually gives us more momentum.”

Although July 1 marks the beginning of the “individual mandate” — the legal obligation to obtain health insurance — the real deadline is Dec. 31. When Massachusetts residents file their state tax returns next spring, they must certify that they had acceptable coverage as of the end of 2007 — or lose the $219 personal exemption. The penalty grows steeper in subsequent years, big enough, officials hope, to persuade most holdouts to get coverage.

The state’s 175,000 employers have to pitch in, too. Businesses with 11 or more full-time employees that do not offer health insurance must pay an annual “fair share” assessment of $295 per employee. And businesses must arrange to allow workers to pay health insurance premiums with pre-tax dollars.

“We need to be fair and lenient in terms of enforcement both on employers and individuals in the first year in order to not incur some kind of a backlash,” said Richard C. Lord, president of Associated Industries of Massachusetts and a member of the Connector board. “We need to . . . give everybody a chance to adjust to the new realities.”

The government, for its part, is defining basic coverage and trying to make insurance more affordable. Under its new Commonwealth Care program, it is subsidizing coverage with no annual deductible on a sliding scale for people with incomes of up to 300 percent of the federal poverty level, or $61,950 for a family of four. About 130,000 low-income people are already enrolled either in Commonwealth Care or MassHealth, the state’s Medicaid program, state figures show. The poorest pay no premiums.

Those who do not qualify for subsidies and cannot get coverage through their jobs can buy low-cost but unsubsidized health plans offered by private insurers through the Connector under the Commonwealth Choice program. Premiums go up with age, but people cannot be charged more if they are sick or are denied coverage because of a preexisting condition.

Costs are still too high for some. Already, state officials expect to exempt 60,000 residents from the new mandate because they cannot afford the insurance at the going rates, even though they earn too much to qualify for subsidies. That is a big reason that Massachusetts is destined to fall short of universal coverage under the new law, officials say, although proponents say that covering 99 percent of residents is still possible.

“Affordability is the big question here,” said Kathy Swartz, a professor at the Harvard School of Public Health, who noted that even those with a basic plan still could face high deductibles. “It’s certainly what a lot of other states are wrestling with — how do you bring the costs down?”

The state’s costs are a concern, as well, with some analysts wondering whether Massachusetts will be able to keep funding the $1.6 billion a year program if the economy slumps or costs rise substantially over the next few years.

“This is not an enterprise for the faint of heart,” said former Democratic state lawmaker John McDonough, executive director of Health Care for All, a nonprofit group that pushed for the new law. “There are always risks. There are always problems. There are always clouds on the horizon that could turn into a storm. Get used to it.”

About 57 percent of all Massachusetts residents say they support making health insurance compulsory, according to a poll released last week by the Kaiser Family Foundation. But two-thirds of respondents said they expect the new law to cause their taxes to increase. And 72 percent said they did not know the deadline for getting coverage. The plain fact is that most residents will not be affected directly by the new law because more than 90 percent already have insurance, often through their jobs or, for the elderly, through Medicare.

Charles Paine, 64, a cab driver from the Boston suburb of Waltham, said he supported the law. Paine, who has diabetes, already receives help from the state and said he expects to enroll in one of the subsidized plans.

“I’m one of the ones they call working poor,” he said. “I make enough to get by, but I don’t have enough to pay my bills and have health insurance. I think it’s ludicrous not to have health insurance for everyone. I don’t think you should work your whole life, and get sick, and lose everything you’ve worked for. It will be tight for me, but I gotta have it.”


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