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The Facts On Massachusetts Health Reform



January 30th, 2012

Last Thursday’s Republican Presidential Debate in Florida included a lively, but not always accurate, exchange on health reform in Massachusetts.  In particular, Senator Santorum reported that one in four Massachusetts residents were going without needed care because of high costs; he also implied that the share of residents choosing to pay the fine for failing to comply with the individual mandate, and the share of residents who were free riders on the system, were serious problems in the state.  None of that is true.

My colleagues and I have been tracking health reform in Massachusetts since 2006, with a summary of our most recent findings published in Health Affairs last week.  As we report, Massachusetts continues to show strong gains in insurance coverage, access to care, and self-reported health status under reform, all important goals of the state’s 2006 legislation.  Currently residents of the Bay State enjoy the highest level of insurance coverage in the nation, with most of that coverage provided through their jobs, as it was before health reform.  As Governor Romney noted, a majority of Massachusetts residents continue to support the state’s reform efforts.

Contrary to Senator Santorum’s claims, very few residents of the state are “free riders” on the health care system in Massachusetts, moving in and out of coverage as they need care.  Based on the most recent data available, nearly all residents of the state (96 percent in 2010) report continuous coverage over the year in the Massachusetts Division of Health Care Finance and Policy’s annual survey (see Table A. 1-1) and nearly all tax filers (92 percent in 2009) report full year coverage as part of the health insurance tax filing to the  Massachusetts Department of Revenue.

During the early years under reform, the Massachusetts Division of Insurance did report an increase in individuals purchasing coverage for a short period of time as they needed care (from 3,508 to 17,177 of the more than 6 million residents of the state); however, the state addressed that issue by imposing annual open enrollment periods, as is the norm for private coverage.  Reducing the incentives for free riders is consistent with the underlying principle of reform in Massachusetts of shared responsibility among individuals, employers, and the state.  For more on this issue, see FactCheck.Org and Cato@Liberty.

The evidence also suggests that few Massachusetts residents are paying a penalty for failing to comply with the individual mandate.  In tax year 2009 (the most recent year for which data are reported), only 48,000 out of 4.7 million tax filers were assessed a penalty for failing to comply with the individual mandate when they had access to affordable coverage.  Most of the remaining uninsured in Massachusetts were exempted from the penalty because of their low incomes.

That isn’t to say that things are perfect in Massachusetts.  While access to care has improved since health reform began in 2006, barriers to obtaining care still exist for some Bay State residents, particularly those with lower incomes and the uninsured.  In 2010, about one in five nonelderly adults in the state reported problems obtaining care over the past year, often because they had difficulties finding a doctor’s office or clinic that was accepting new patients or that was accepting patients with their type of insurance.  Massachusetts’s experience is a reminder that expanding insurance coverage improves access to care but doesn’t guarantee care.  Unfortunately, this holds true across the country.  The solution to these barriers is not the elimination of  the insurance coverage expansion, as some seem to suggest, but rather strategies to improve the availability of health care.

Finally, Massachusetts, like the rest of the country, is struggling with high health care costs, which have serious implications for the affordability of health care for individuals and their families.  While not as severe a problem as reported by Senator Santorum in the debate, some residents of Massachusetts do report going without needed care because of the costs of that care.  However, that’s not a function of the state’s 2006 health reform legislation:  Massachusetts made the decision in 2006 to forgo tackling the challenge of rising health care costs so as not to delay the expansion of health insurance coverage to most residents of the state.  While Massachusetts’s health reform initiative did provide some improvements in the affordability of care for individuals, those gains have been eroding over time as health care costs continue to rise.

The continued growth in health care costs is not a sign of the failure of that state’s 2006 health reform initiative, but rather a sign of the need to move to the next stage of reform that addresses the way health care is organized, delivered, and paid for across the nation.  That’s a much more challenging endeavor than Massachusetts’s push toward universal coverage, but one that is included in the federal Affordable Care Act and one that we as a country can’t afford to fail at.  Policymakers of both parties need to come together to take on the considerable challenge of reining in health care costs as the status quo is not sustainable for Massachusetts or the nation.

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