The president of the Blue Cross Blue Shield Foundation of Massachusetts hits some of the highlights of a recent foundation-supported report on that state’s ongoing health reform effort.
Call it what you like—“RomneyCare,” “ObamneyCare,” or plain old Massachusetts Health Reform—it’s working pretty much as intended, at a cost that’s within what was projected, and with continued broad support from the general public and the state’s health care stakeholders. These are among the findings in a five-year progress report recently published by the Blue Cross Blue Shield of Massachusetts Foundation.
The report is the latest in a decade-long series of foundation-sponsored research studies, policy papers, and opinion surveys that helped inform the design and implementation of the 2006 Massachusetts reform law and have since assessed its impact. An assessment of the latest findings from one of those ongoing studies, the Massachusetts Health Reform Survey, can be found in a Health Affairs Web First published this week (free access to full text for two weeks).
However strongly some may disagree with the way Massachusetts health reform was accomplished, or even with its underlying goals, it’s hard to argue with the results. An estimated 98 percent of the state’s 6.5 million residents had health insurance in 2010, by far the highest rate of people with health insurance in the nation. As more residents have gained coverage, fewer have reported they have unmet needs for care, especially middle- and low-income residents, members of racial and ethnic minorities, and people with chronic diseases. For those of us who are committed to expanding access to health care, particularly for low-income and disadvantaged individuals and families, this is cause for celebration.
Focusing on goals and results
The foundation’s report examines what each of the major provisions in the 2006 law was intended to accomplish and how it is working. Prior to health reform, nearly three-quarters of the state’s uninsured were low-income individuals who couldn’t afford to purchase health insurance, but whose earnings were too high to qualify for Medicaid. Many were part-time workers or employees of very small businesses where employer-sponsored coverage was not offered.
Setting a goal of nearly universal coverage, the law includes a mix of programs, incentives, and requirements that make coverage more affordable for low-income residents while also encouraging employer-sponsored and individual enrollment in private health plans.
Lawmakers used the flexibility allowed by the state’s federal Medicaid waiver to expand subsidized coverage to low-income residents through a new program called Commonwealth Care and to restore and expand some categories of Medicaid coverage, with federal and state funding split roughly 50/50. Reflecting the Massachusetts law’s underlying principle of shared responsibility, it also famously includes an individual mandate–the requirement that residents obtain health coverage if an affordable plan is available to them or face a financial penalty–and it makes employers with eleven or more workers financially accountable for failing to make a “fair and reasonable” contribution to their employees’ health coverage.
To make it easier for individuals and small businesses to find and purchase affordable coverage, the law created an insurance exchange, the Massachusetts Health Connector. The Connector was given a dual role–to oversee subsidized Commonwealth Care coverage for low-income residents and to act as an online, one-stop shopping site for selected, unsubsidized individual and small-business plans that can also be purchased directly from the private health plans themselves.
Along with the overall gains in coverage and access to care, the progress report points out that employer participation in offering health insurance has risen under health reform. Seventy-seven percent of Massachusetts employers with three or more employees offered health insurance coverage to their employees in 2010, up seven percentage points since 2005. (This compares with 69 percent of all employers nationwide that offered health coverage to their workers in 2010, according to the [Henry J.] Kaiser Family Foundation/Health Research and Educational Trust 2010 Annual Survey.) The Blue Cross Blue Shield of Massachusetts Foundation progress report finds that the Connector’s active procurement process has helped keep increases in the cost of subsidized plans for individuals well below the market average, but it has so far been unable to make a sizeable dent in the small business market.
As for the overall cost of health reform, the state’s share amounted to just over one percent of its $32 billion overall budget last fiscal year, and the average incremental cost of expanded public coverage has been well within early projections.
The challenge of rising costs
The 2006 law was not designed to tackle the state’s historically high health care costs. It did, however, help trigger a process of examining the underlying causes of high costs and developing recommendations for changes in care delivery and payments to providers. The past two years have been marked both by increased pressure from state regulators and by private-sector initiatives such as the widening adoption of global payment as the basis for contracts between health plans and physician groups and some hospital systems. While several major cost-containment proposals have been filed with the Massachusetts legislature, including one from Governor Deval Patrick (D), no consensus has emerged so far on what, if any, role the state should play in holding down provider payments and health insurance premiums.
In 2011, out of concern that relentless increases in health care costs could threaten the state’s ability to deliver on its commitment to make coverage accessible, the foundation decided to focus more resources on finding ways to make health care delivery less costly without sacrificing access or quality. We created a new grant-making program area focused on supporting sustainable cost containment initiatives, and we’re sponsoring extensive research on health care costs and potential solutions. Our goal is to act as a catalyst for the state’s health care community to address costs with the same level of commitment, innovation, and unified action that we saw during the first round of Massachusetts health reform.
As the progress report concludes, “If Massachusetts is able to moderate future increases in health care spending while continuing to expand access to coverage and care, its status as a pioneer in transforming the U.S. health care system will be assured.”
Since the founding of the Blue Cross Blue Shield of Massachusetts Foundation in 2001 as an independent, not-for-profit organization, the foundation has sponsored research, convened stakeholders, and made more than $38 million in grants to community health centers, hospitals, and consumer groups to support outreach, enrollment, care coordination, and advocacy on behalf of uninsured and under-insured, low-income residents of Massachusetts.