How Massachusetts is faring under its landmark health-care reform law

The federal Affordable Care Act is set to kick in fully by 2014, now that the US Supreme Court has affirmed that it is constitutional. The Massachusetts reforms upon which the ACA is based took effect in 2006, under then-Gov. Mitt Romney. So, what does the record show in Massachusetts – did jobs evaporate and is the state bankrupt, as critics portended? Or is the Bay State rather an example of health-care nirvana, as supporters predicted?

Neither extreme is true, and the lessons of Massachusetts may not all apply in the broader national context. But overall, the state is doing pretty well under its reform law, say those who have studied its effects upon residents, businesses, and state coffers.

For one, about 400,000 additional people are newly covered by health insurance, bringing down the share of uninsured residents from 7.4 percent in 2004 to 1.9 percent by 2010, according to the Massachusetts Division of Health Care Finance and Policy. Massachusetts now has the highest percentage of insured residents among all the states. 

Costs to the state are also within original estimates, according to the Massachusetts Taxpayers Foundation, contrary to claims by former Sen. Rick Santorum (R) of Pennsylvania that health-care reform was “bankrupting Massachusetts.”

But the state isn’t a perfect demonstration lab for national reform.

The Massachusetts law is funded differently from the federal one. The state didn’t need to increase income taxes to pay for it – most funding for the new law came from the federal government as part of Medicaid, and from shifting around state funds, says John McDonough, a professor at the Harvard School of Public Health.

Critics say that although Massachusetts residents didn't have to pick up much of the tab for reform, the ACA will have more of a negative impact due to tax increases. “The cost that Massachusetts was able to push off onto the federal government will go to taxpayers [under the ACA],” says David Tuerck, an economics professor and executive director of the Beacon Hill Institute, a fiscally conservative think tank.

Still, the state’s law and the national law have many similarities.

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