Most in Massachusetts met individual insurance mandate

Only 2.5% of tax filers paid a penalty for not having health insurance. But a physician shortage could pose problems for the reform program.

By Doug Trapp — Posted June 23, 2008

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Ninety-five percent of Massachusetts tax filers for 2007 said they met a state mandate to have health insurance -- a compliance rate that health system reform stakeholders touted as a sign the new program is working.

"It's been wildly successful," said Mario Motta, MD, president-elect of the Massachusetts Medical Society, especially enrollment in the state-subsidized private plans for people earning 300% or less of the federal poverty level.

Brian Rosman, research director at Health Care For All, a Massachusetts patient advocacy organization, was impressed that so many residents met the new requirement. "I was frankly expecting a much higher noncompliance rate, like 15% or 20%."

The findings are based on a Massachusetts Dept. of Revenue analysis of 86% of the expected 2007 tax filers, or about 3.3 million people. Insurance status is self-reported on tax returns and will be verified by the Dept. of Revenue.

Massachusetts residents are required to have health insurance, prove they cannot afford it or pay a tax penalty, which will rise from $219 in 2007 to a maximum of $912 for the 2008 tax year.

Of the 5% of residents who said on their 2007 tax returns that they don't have health insurance, about half, or 2.5% of tax filers, were deemed by the state to be able to afford coverage. They were subject to the $219 penalty. Another 2% of tax filers were deemed unable to afford health insurance and were exempt from the mandate.

The individual mandate's impact is reflected in the state's uninsured rolls. The percentage of people lacking coverage dropped from 13% in fall 2006 to 7.1% by fall 2007, according to an analysis of two phone surveys of about 3,000 adults published online in Health Affairs June 3. The period was the first year the state implemented its health system reform, the Commonwealth Connector program.

To help people afford coverage, Massachusetts offers subsidized insurance to those earning 300% of poverty level or less through private plans participating in the part of the reform program called Commonwealth Care. People earning 150% of poverty or less are eligible for virtually free insurance. Residents with incomes above 300% of poverty have access to unsubsidized insurance through private plans operating in the Commonwealth Choice portion of the reform program.

By now there are likely even fewer uninsured residents than in fall 2007, and there will be fewer still in the future, said Jon Kingsdale, PhD, executive director of the Connector Authority, the organization implementing the health system reforms.

"I don't know what it's going to get down to, whether it's going to be 2% or 3% overall. I'm really not sure," he said. "I do know it's going in the right direction, which is a contrast with the direction the rest of the country is going in."

Some experts had feared businesses would pay an annual $295 fee per employee in lieu of offering coverage, but the survey revealed that the percentage of adults between 18 and 64 with employer-sponsored coverage grew. For example, in fall 2006, 37.7% of adults in families earning less than 300% of poverty level said they had coverage from their workplace, but that increased to 42.3% by fall 2007. For adults at all income levels, employer-sponsored coverage increased from 66.6% in fall 2006 to 69.3% in fall 2007.

Still, concerns about the ever-increasing cost of health insurance and health care in general are worrisome, Kingsdale said. The reform program is millions over budget because of higher-than-expected numbers of uninsured people and because many more people than anticipated enrolled in the subsidized Commonwealth Care plans.

"If we don't control the cost of medical care and health insurance and moderate the increase yearly, I don't think near-universal coverage is sustainable," he said.

Physician shortage a concern

The phone survey also showed that while Massachusetts residents had better access to health insurance, finding a physician was not getting easier. "The availability of primary care is the single biggest problem [for the reforms]," Dr. Motta said.

The analysis found that 6.9% of adults in families earning less than 300% of poverty reported in fall 2007 that they did not get needed care in the past year because of trouble finding an available doctor or other health professional. That is up from 4.1% in fall 2006. For all adults, that percentage increased from 3.5% in fall 2006 to 4.8% in fall 2007.

Dr. Motta said Massachusetts' physician shortage isn't obvious when counting the number of licensed doctors. Some doctors work for academic hospitals and see only a few patients a week, while others conduct research for pharmaceutical companies and other entities.

"On paper, it makes us look like we have an overabundance of physicians," he said. In contrast, the MMS 2007 Physician Workforce Survey reported a critical shortage of internists and a severe shortage of family physicians. For example, 43% of community hospitals in 2007 said they faced family physician shortages, and 54% reported a shortage of internists.

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Status of uninsured taxpayers

More than half of the Massachusetts residents who declared on their 2007 tax returns that they lacked health coverage could have purchased it, according to state insurance affordability standards. Others were exempt from the state's insurance mandate, mostly because they had no access to affordable options.

Able to afford insurance 97,000
Unable to afford insurance 62,000
Claimed religious exemption 9,000
Total self-declared uninsured taxpayers 168,000

Note: Figures are based on 86% of returns expected to be filed for the 2007 tax year.

Source: Massachusetts Dept. of Revenue, June

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Access improves in Massachusetts

Following Massachusetts' reforms, researchers found that a decreasing percentage of adults, especially in families earning less than 300% of the federal poverty level, said they had skipped needed care because of cost.

Type of care skipped All adults Adults, family income below 300% of poverty
2006 2007 2006 2007
Primary doctor care 5.8% 3.0% 11.3% 4.8%
Specialist care 4.9% 2.1% 8.5% 3.6%
Medical test, treatment, follow-up 6.3% 2.3% 11.3% 4.4%
Preventive care screening 3.5% 1.9% 5.8% 2.8%
Prescription drugs 5.6% 3.5% 10.1% 6.1%

Note: Findings are from two telephone surveys of about 3,000 adults -- one in fall 2006, just before the reforms, and the other in fall 2007, about one year after implementation.

Source: "On the Road to Universal Coverage: Impacts of Reform in Massachusetts at One Year, " Health Affairs, June 3

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Fewer uninsured

The percentage of Massachusetts residents without insurance dropped by nearly half after the state's health system reform package kicked in.

Insurance status All adults Adults, family income below 300% of poverty
2006 2007 2006 2007
Uninsured 13.0% 7.1% 23.8% 12.9%
Employer coverage 66.6% 69.3% 37.7% 42.3%
Other insurance 20.4% 23.6% 38.5% 44.8%

Note: Findings are from two telephone surveys of about 3,000 adults -- one in fall 2006, just before the reforms, and the other in fall 2007, about one year after implementation.

Source: "On the Road to Universal Coverage: Impacts of Reform in Massachusetts at One Year," Health Affairs, June 3

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External links

"On the Road to Universal Coverage: Impacts of Reform in Massachusetts at One Year," abstract, Health Affairs, June 3 (link)

Massachusetts Dept. of Revenue (link)

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