Massachusetts’ innovative approach to health care reform, adopted in 2006, has become the focus of substantial national attention as Congress and the Administration in Washington focus intense attention on health reform. Many federal proposals build on elements that have been implemented in Massachusetts. Two questions are of interest in this regard: can the federal government adopt the Massachusetts approach, and, failing federal reform, can Massachusetts serve as a model for other States?
For background, the key elements of the Massachusetts program can be summarized very generally as follows: An individual mandate requiring most residents to have insurance; assessments on certain employers who do not make adequate insurance available to their employees; a “health care connector” that links individuals and small businesses to insurance products; and State-subsidized insurance for persons who are not eligible for Medicaid with incomes up to 300% of the Federal poverty level (the “CommonwealthCare” program).
The individual mandate is key to achieving near universal coverage, and other components of the reform facilitate access to “affordable” coverage. The reform’s approach is to move uninsured people into insured status, and to reduce reliance by safety net hospitals on disproportionate share and supplemental Medicaid payments by providing them an insured population in lieu of uninsured individuals.
Many of these elements appear in the various federal proposals, including the individual mandate, the connector and imposing some form of assessment on employers. As to other elements of federal proposals, Massachusetts does not include a public plan option, although CommonwealthCare could be viewed as a workable alternative.
However, in creating the coalition that secured passage of the reform, political and policy leaders deliberately chose to address access first and defer dealing with how the program would be paid for. This of course is not an option for the federal government, which is struggling with how reform will be funded.
Massachusetts could defer the cost issue because the amount of new State dollars needed at the outset was relatively small. This was so because of: (a) CMS’ willingness to grant a waiver allowing federal Medicaid matching funds for the CommonwealthCare subsidies; (b) the generous level of State dollars that was already flowing into the health care system through Medicaid and the State’s uncompensated care pool; and (c) the relatively larger number of large and small business that already provided some coverage for their employees.
Of course, the economy and serious budget problems are now affecting CommonwealthCare’s financing. This year for the first time there will be some restrictions on who can enroll, and some adjustments to available benefits. Massachusetts did try to address health care cost through legislation in 2008, but the focus was more on long-term structural changes, such as incentives to promote more primary care physicians (one of the downsides of improving access in Massachusetts was to make worse an already bad situation of too few primary care physicians), supporting the greater use of nurse practitioners and effectively mandating that hospitals and physicians move toward adoption of electronic medical records and CPOE systems. The legislation, however, is not generating immediate cost savings.
In summary, Massachusetts’ program has many elements that could work at the federal level and could be adapted for use in other States. Two critical points need to be kept in mind, however: First, the creation of a coalition that included Government (including a Republican Governor and an overwhelmingly Democratic legislature), consumer advocates, employers and insurers and the willingness of each of the groups to compromise (an individual mandate balanced against some employer assessments, for example) got the reform enacted but is not easy to replicate.
Second, as noted above, financing could be deferred because the marginal dollars needed to fund the reform initially were not so great. (Shortly after enactment of Massachusetts’ reform, a California study concluded that implementing the same program there would cost that State an additional $12 billion.) The key issue for the federal government is how to fund reforms. Massachusetts may be a good model but the particular financial circumstances that existed when its reform was enacted may make the model difficult to replicate elsewhere.
Stephen M. Weiner serves as President of the national nonprofit HealthWell Foundation (www.healthwellfoundation.org), which provides financial assistance to underinsured patients coping with serious and chronic conditions. He is also Chair of the Health Law practice for Mintz Levin and has over thirty years of health care experience as a policy maker, educator and attorney.