A mandate on individuals to buy health insurance can work – just don’t expect it to reduce the cost of care.
The message is significant, because Democratic proposals in Congress have big similarities to reforms that Massachusetts adopted in 2006.
Common elements include:
•A mandate on individuals to buy insurance.
•Subsidies to help lower-income people pay for it.
•Exemptions for people who don’t qualify for subsidies and can’t afford insurance.
•An “exchange” where people shop for state-approved policies.
The goal is to slash the number of people who are uninsured.
In the heat of national debate, the Bay State’s experience has inspired Rorschach-like interpretations. Supporters see a model for the nation. Detractors say it’s a model of failure, not for imitation.
No havoc due to individual mandate
Amid the din, however, health policy experts generally agree on some basic lessons:
First, a mandate for individuals to buy insurance can be imposed without causing havoc. Hospitals and individuals have adapted. Employers haven’t dropped the health plans they sponsor.
Second, the mandate, while expanding coverage to many uninsured, doesn’t solve the deeper problem of escalating healthcare costs.
She notes that the 2006 reforms in Massachusetts focused squarely on access, not on medical-cost inflation. So it’s unfair to call the Bay State’s law a failure on that front.
But both the state and the nation are now forced to at least begin to grapple with that question.
Taming costs is tougher on two fronts than expanding access: There’s less certainty about how to do it, and it’s more difficult to build political support as legislators get caught between healthcare-industry lobbyists and wary voters.
Some 97 percent are insured
On access to care, Massachusetts can claim big strides but not truly universal coverage. Some 97 percent of residents have insurance, according to the Connector, the state-run exchange for buying insurance. That’s well above any other state. Nationwide, 85 percent of Americans are insured.
The rise of a state-run insurance pool and subsidies for individuals haven’t caused employers to drop their own health plans, as skeptics had feared. One reason: The law requires businesses with more than 10 employees to either offer coverage or pay $295 a month per worker to the state. Another reason is that a business that drops coverage might have trouble holding onto skilled workers.
The Massachusetts law, passed by a Democratic legislature and signed by Republican then-Gov. Mitt Romney, has expanded the ranks of insured at all levels. Some 163,000 residents bought policies using new “Commonwealth Care” subsidies. Another 190,000 enrolled in employer plans or bought insurance privately, without subsidies. Even MassHealth, the Medicaid program for the poor, expanded its rolls by 76,000, as of the start of this year – in part by adding more children.
Such views are widely shared, judging by opinion polls last year showing solid public support for the program. Still, the system has cracks.
Subsidies remain a key question
Health coverage is hard for many residents here to afford, just as in other states. Ms. Wideman is stretching to keep her own insurance intact, after losing a job, by making payments under the federal COBRA program for the unemployed.
A key question in Massachusetts and the nation is how much to subsidize people who don’t qualify for Medicaid. For a Bay State family of four, for example, assistance is available up to an income of $66,000. Above that, many families enter a zone where they get no help from the state, and buying insurance on their own may cost more than the state considers affordable. Those families can either struggle to pay premiums and copayments, or use a state exemption and go without insurance.
That’s where cost control comes in. Massachusetts sees that as the next phase of reform, or else voters will face tough choices between rising taxes and squeezed coverage.
Already, budget woes have prompted the state to scale back on access – paring coverage for legal immigrants and ending automatic enrollment for people who qualify for subsidized care.
Critics on the left say the answer is a stronger government role as a payer or perhaps as the single provider of care. On the right, critics say more consumer choice and industry competition will reduce costs and allow more people to afford coverage.
State sets basic standards about what's covered
In Massachusetts, consumers choose from a range of plans, but the state sets basic standards about what care and procedures are covered. The Bay State’s reforms seek to occupy a middle ground.
“The big lesson is that the mandate works – we’ve dramatically increased our insurance coverage” without operational glitches or enforcement problems, says Jonathan Gruber, a healthcare economist who serves on the Connector’s board.
Another positive lesson, he says, is that setting up the exchange caused costs to fall for residents who buy insurance directly (rather than through an employer or government program).
Sarah Beth Glicksteen contributed to this report.
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