Government

Mass health reform: Still a work in progress

A year has passed since Massachusetts approved its broad health reform package. Several states are borrowing its ideas before anyone knows for sure the program will work.

By Doug Trapp — Posted April 2, 2007

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When Massachusetts made a splash last year with its universal health care plan, the state coined a new buzzword as well: "connector."

Simply put, the term means connecting the uninsured to the health care system. Massachusetts would do this using privately run but state-supervised health plans.

Now, one year later, several states are following Massachusetts' lead. The word "connector" has popped up in proposals introduced in California and Connecticut. Six other states have plans using similar mechanisms with other names.

But is it too early? Massachusetts' Commonwealth Connector still hasn't been implemented fully. The eight-member oversight board still must make key decisions about how to carry out the reforms.

The $2.18 billion plan passed in part because lawmakers didn't get too specific in the legislation, said Len Nichols, PhD, director of the health policy program at the New America Foundation, a nonprofit, nonpartisan public policy institute in Washington, D.C. "They left important details to the Connector board."

Just like car insurance

While many specifics still must be worked out, the basics are there. The bipartisan reform, adopted in April 2006, includes a major innovation: mandatory proof of health insurance.

Just as states require people to insure their cars, Massachusetts is demanding its residents insure their bodies -- by July 1. If not, residents face $200 in tax penalties next year and a fine the following year equal to half the cost of a year's worth of the most affordable insurance premium available to them, said Commonwealth Connector spokeswoman Joan Fallon.

The Connector Authority, as the oversight board is known, already is providing Commonwealth Care, which includes two types of insurance. The first, which began Oct. 1, 2006, is available to people who are earning less than the federal poverty level. It is free except for minimal co-pays.

On Jan. 1, the Connector began enrolling people earning up to triple the poverty level who don't have access to insurance through work. This is the second type of coverage, and it features co-pays and sliding-scale premiums.

As of March 1, about 52,000 previously uninsured residents have been enrolled in one of the four Commonwealth Connector health plans, all privately run Medicaid contractors, Fallon said. Estimates of the number of uninsured before reform ranged from 400,000 to 650,000.

Virtually all of these 52,000 enrollees were known to the state from their use of the uncompensated care pool or one of the state's 53 community health centers. The pool is a state fund used to help pay for medically necessary care for the uninsured. The Connector Authority gave 47,859 free care pool users type-one coverage and allowed them to choose between the four plans. The panel automatically enrolled people who failed to select one, Fallon said.

Too soon to tell

Physicians are enthusiastic about the reforms, said Kenneth Peelle, MD, president of the Massachusetts Medical Society. But it's still too early to judge the overall impact the changes will have, he said.

Since enrollment began Jan. 1, only about 4,000 people have signed up voluntarily for the type-two coverage, Fallon said.

Philip Severin, MD, medical director of the Codman Square Health Center in Boston, said a $200 fine for not buying insurance is not much of an incentive. "I think people are willing to take that risk."

Anecdotally, Boston Medical Center HealthNet saw a small early spike in mental health and substance abuse treatment among its more than 20,000 enrollees, nearly all of whom the state automatically signed up, said John Cragin, the plan's senior director of Commonwealth Care.

Also, Cragin said, enrollees so far frequently have been older than 45. "So that has implications in terms of utilization."

Snapshots of the first group of enrollees are emerging, said Deborah Gordon, spokeswoman for Network Health, which has 22,000 Commonwealth Care enrollees as of March 1. They show that the reforms are giving some people much-needed access to care.

For example, one enrollee is a 32-year-old freelance videographer who hadn't had a primary care doctor in a decade. Another is a 52-year-old horse trainer injured during a work accident in Florida. He had no follow-up care while living in Massachusetts in the off season until he was automatically enrolled in the program, Gordon said.

The effort to expand care to the uninsured might hit a roadblock, however, in the shortage of primary care doctors in Massachusetts.

"That's the one of the elephants on the table," said Chip Joffe-Halpern, Connector Authority board member and executive director of Ecu-Health Care, a nonprofit health care access program in North Adams.

Massachusetts has a severe shortage of family physicians and critical shortage of internists, according to the Massachusetts Medical Society's June 2006 Physician Workforce Survey. The reforms threaten to exacerbate that situation by bringing an unknown number of uninsured people into primary care offices for the first time, said E. John Lentini, DO, immediate past president of the Massachusetts Academy of Family Physicians.

"That means we're going to have a huge problem at the end of the pipeline a few years from now," he said.

It's also not clear how many physician groups are going to contract with the third type of health plans, called Commonwealth Choice, said Hugh Taylor, MD, a former president of the Massachusetts Academy of Family Physicians. Those plans will be offered to uninsured residents earning more than 300% of the poverty level.

The group of 200 doctors of which Dr. Taylor is a member is taking a wait-and-see approach because of concerns about the Connector plans' payment rates. They're expected to be higher than for Medicaid but lower than for private insurers.

As of March 1, eight states are considering health reform legislation with a connector-style authority overseeing private plans, said Laura Tobler, health policy analyst with the National Conference of State Legislatures. The bipartisan compromise of Massachusetts is encouraging state lawmakers who were already talking about health reform to take action, she said.

California Gov. Arnold Schwarzenegger's plan has a connector and an individual health insurance mandate. So do bills introduced by Connecticut and Michigan lawmakers. A proposal by Illinois Gov. Rod Blagojevich foresees a mandate a few years hence.

Massachusetts benefits from having a relatively low percentage of uninsured residents -- 10.7%, according to a U.S. Census Bureau average between 2003 and 2005. In contrast, Illinois has 14.2% and California has 18.8%.

One policy analyst said the connector design might be the best way for states to address the problem of the uninsured because it preserves choice while expanding access. "It's hard to imagine any other model, really," said John Holahan, PhD, director of the health policy research center at the Urban Institute.

Massachusetts' move to universal health care could be easier than it would be for others, given the state's history of health reform.

The state created an uncompensated care pool in 1985 to help hospitals cover the costs of care for low-income, uninsured patients. The pool is funded partially by a tax on health plans' income and hospitals' private charges. The pool, unlike the Commonwealth Connector, does not reimburse physicians or labs.

In fiscal 2005, $701.8 million in medical expenses for an estimated 450,000 individuals was billed to the pool. The state is phasing this money into Commonwealth Connector. In fiscal 2007, the free pool has more than $600 million, which is expected to be cut to $320 million by 2009, according to an analysis by the Massachusetts Taxpayers Foundation, a nonpartisan group that tracks state taxes and spending.

Not a finished product

For the Connector to work, its board must find the right compromises for a few unsettled issues.

The panel might have overcome its first major hurdle. In January, bids came in higher than expected for Commonwealth Choice, coverage for people earning more than 300% of the poverty level, said Dolores Mitchell, board member and executive director of the Group Insurance Commission, which oversees state employee and retiree benefits.

When the Connector reforms passed, those plans were estimated to cost an average of $200 per month for each enrollee, Mitchell said. Later, that was revised to about $300. But some of the initial bids came in at an average of $380. The board deemed that figure too high and asked for rebids. On March 8 the panel approved seven companies' bids for 28 plans. The cheapest premiums ranged between $154 and $175 per month for the average uninsured resident, depending on the region, states a March 8 release by the board. Plan deductibles are anywhere from zero to $2,000 for individuals.

Unresolved issues with the Connector include:

  • Whether people used to getting care free or skipping it altogether will resist paying monthly premiums. "It remains to be seen whether or not families will be able to afford the plan," said Patricia A. Sereno, MD, MPH, president of the family physicians academy.
  • Whether employers that now provide insurance will decide to drop it and pay the penalty for not offering coverage. The fine is only about $300 per employee per year, and some believe it needs to be increased, Mitchell said.

"Not a game of perfect"

Although doctors, policy experts and Connector board members cited concerns about the potential problems, they were optimistic that the board would be able to make the plan work.

"There's a huge political spectrum of support for this," said Michael J. Widmer, president of the Massachusetts Taxpayers Foundation.

Family physician Dr. Lentini said the plan's financing is the major issue. "But still there's no way this is going to be derailed and not work."

The MMS' Dr. Peelle, a radiologist in Lowell, likes the Connector's odds. "There may be some bumps along the road, but we think it's got a good chance of success."

When the law passed, even its architects said it would need to be reworked and adjusted, said Connector board member Joffe-Halpern. "We have to accept that's OK. Health care is not a game of perfect."

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ADDITIONAL INFORMATION

Target: Health reform

[download pdf]

When Massachusetts passed its comprehensive health reform package last year, the move sparked renewed state interest in universal health care. As of March 1, lawmakers or governors in at least eight states had introduced plans with a Massachusetts-like state authority that connects the uninsured to private coverage. Others are considering bills using different methods.

Passed: Maine, Massachusetts, Vermont

Proposed: California, Connecticut, Hawaii, Illinois, Maryland, Michigan, Minnesota, Missouri, Oregon, Pennsylvania, Washington

Maine

Uninsured: 130,000
Reform: Subsidized insurance through single private carrier; insurance rate regulations.Dirigo Health, adopted in 2003, was the first universal coverage program passed by a state. The plan covered 16,000 people in its first 15 months but is behind its goal of covering all Mainers by 2009.

California

Uninsured: 6.5 million
Reform: Individual insurance mandate; subsidized insurance; Medicaid expansion.The governor's $12 billion plan has drawn the ire of doctors with its proposed 3% tax on physicians' gross revenues.

Illinois

Uninsured: 1.4 million
Reform: Subsidized health plans for the uninsured; expanded Medicaid.The governor's proposal, Illinois Covered, would work in conjunction with his in-progress All Kids universal children's insurance program.

Minnesota

Uninsured: 380,000
Reform: Individual insurance mandate; guaranteed insurance; tax deduction for buying health insurance.Healthy Minnesota is backed by the Minnesota Medical Assn., but at least three other bills address universal health insurance.

Sources: Academy Health; National Conference of State Legislatures

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Connecting the dollars

The Commonwealth Connector health reform is expected to require $2.2 billion in funding in 2007, including $400 million in new dollars. So far, there are about 52,000 Commonwealth Care enrollees. Financing includes:

$1.1 billion in federal dollars.
$688 million from the state's general fund.
$160 million from existing hospital taxes.
$160 million from existing health plan taxes.

Source: Massachusetts Taxpayers Foundation, November 2006

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What the public thinks

A CBS/New York Times telephone poll of nearly 1,300 adults in February shows that Americans have an appetite for national health system reform.

What level of reform does
the health system need?
Fundamental changes 54%
Complete overhaul 36%
Minor changes 8%
Don't know/no answer 2%
Which would be better?
Government-run, universal
coverage system
47%
Current private system with many uninsured 38%
A combination 4%
Neither 2%
Don't know/no answer 9%
How serious is the problem
of the uninsured?
Very 70%
Somewhat 25%
Not very/not at all 4%
Don't know/no answer 1%

Source: CBS/New York Times POLL

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External links

Commonwealth Connector (link)

National Conference of State Legislatures universal health care bills tracking page (link)

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