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

In Massachusetts, if you don’t buy health insurance, you pay a fine – as will happen under the ACA. When the law first passed, noncompliers lost the personal exemption on state income taxes. In 2008, the state started charging a fine of half the cost of the cheapest plan that could be found under the Massachusetts Health Connector, the state’s version of the insurance exchanges intended to help consumers shop and compare plans.

Though a penalty can now run to $1,200 or more, “it has been remarkably noncontroversial,” says Professor McDonough.

That may be because the state has been lenient in applying those penalties. People who make too much money to be eligible for subsidized coverage but say they still can’t afford insurance can apply for a waiver, which is also available for those who don’t want coverage because of religious beliefs.

In 2010, Massachusetts granted 55 percent of waiver requests for a premium or copay reduction, according to data from the Connector annual report to the legislature.

Since the reform was signed into law in 2006, “the requirement that everybody has health insurance has become a pretty normal part of the way we do things around here,” says McDonough.

Even so, critics argue that the Massachusetts reform hurts business. The state would have created 18,000 more jobs in 2010 without the reform, according to the Beacon Hill Institute. That isn't a huge impact in a state that employs more than 3 million people, says Professor Tuerck, but extrapolated to a national scale, job losses may be more important.

Tuerck argues that reforms not only taxed people by forcing them to buy coverage, but that they also made insurance rates rise. “The bill imposed new costs both on the federal government and on people who had insurance policies in Massachusetts, and we found that the cost of private health insurance had gone up because of Romneycare,” he says. This could be interpreted as having the same effect as a tax increase, which he says has a negative impact on job growth.

Still, according to Beacon’s Hill’s state competitiveness report on March 6, Massachusetts is the top state in the country for economic growth and income.

Massachusetts health care is also often criticized for being too expensive: The premiums are higher than anywhere else in the country.

McDonough argues that although those figures are correct, they don’t give the full picture. “You get a revealing portrait when you look at it based on ability to pay,” he says. Massachusetts premiums are higher, but so is household income – and when measured as a percentage of income, health insurance is cheaper in Massachusetts than in Texas, which has the highest share of uninsured residents in the nation.

Moreover, the high-priced premiums in Massachusetts predate the state's health-care reform law, McDonough says. Although health-care costs are increasing everywhere, the rate of increase has slowed significantly in Massachusetts in the past two years.

“Don’t assume we’re a basket-case on costs,” says McDonough. “We’re probably better off than you are."

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