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What about the Massachusetts plan for universal coverage?

ASK THIS | June 16, 2009

A single-payer advocate warns that the Massachusetts 2006 health care reforms, now being looked at by Congress, may not be a good model for the nation.

By Rachel Nardin

Democratic lawmakers crafting federal health care reform legislation are looking to Massachusetts as a model. The Massachusetts reform of 2006 incorporates many key features being considered on a national level: expansion of public programs, subsidies to help the poor purchase insurance, an exchange to help individuals find affordable plans, regulation of private plans, requirements for an employer contribution, and an individual mandate. But we should not accept uncritically that the Massachusetts reform has been a success and that it would make a good model for the nation. Here are some questions reporters need to ask about the Massachusetts reform.

1. Has the Massachusetts reform achieved universal coverage?

No. The state claims “near-universal” coverage, citing the results of a phone survey by the Urban Institute, which found only 2.6 percent of respondents to be uninsured in mid-2008. However, despite considerable efforts, this survey reached few non-English speaking households and few households lacking landline phones—two  demographic groups with high rates of uninsurance. Other data, including a U.S. Census Bureau survey in March 2008 and state revenue reports, suggest that there are more like 5 percent uninsured. And a May 2009 state report concludes that use of free care has fallen by only 36 percent, rather than the 75 percent to be expected if the state’s uninsured had really dropped from its pre-reform level of 10.4 percent to 2.6 percent.

2. Has the reform been able to ensure the availability of affordable insurance plans?

No. For middle-income adults, even the cheapest (and skimpiest) private plans offered through the state’s health insurance exchange largely do not meet the state’s own affordability guidelines. More than 60,000 residents received an exemption from the mandate in 2007 because the state acknowledged they could not afford any available plan.

3. Has the reform improved access to care?

Less than expected. The reform has improved access to care less than it has improved access to insurance. This is in part because some residents who used to get completely free care now have insurance with unaffordable co-pays and deductibles. The “affordable” plans offered through the state’s insurance exchange also have large co-pays and deductibles. Significant cost-sharing is known to reduce access to care.

Recent data from the Behavioral Risk Factors Surveillance Survey show that while the number of uninsured in Massachusetts has fallen, the number of people reporting that they were unable to see a doctor due to cost has remained fairly stable.

The reform has been more successful at providing people with insurance than it has at ensuring that people can afford care and are protected from bankruptcy should they fall ill.

4. Is the reform sustainable?

No. The reform has been more expensive than expected. It does nothing to control costs and premiums continue to escalate. Premiums for the four subsidized insurance plans rose 9.4 percent in 2009, significantly more than increases in inflation or wages.

The reform increases administrative costs and waste. The insurance exchange adds an additional 4.5 percent administrative cost to each policy it brokers.

To continue to pay for the reform the state is diverting funds from other state programs and is cutting back on the number of people covered by subsidized plans. This follows a pattern seen with other state reforms over the past couple of decades, where expansion of subsidized insurance without real cost control is unsustainable and does not result in a long-term reduction in the numbers of uninsured.

Is there a better alternative?

Yes. Already existing congressional legislation (HR 676 and S 703) would implement single-payer financing of health care while maintaining the private delivery system. A single-payer program would eliminate private insurers and use the administrative savings to provide comprehensive coverage for all. Features of the single-payer plan include:

Comprehensive coverage for all, including doctor, hospital, long-term, mental health, dental and vision care as well as prescription drugs and medical supplies.

No premiums, co-payments, or deductibles that inhibit access to care and burden the poor.

Free choice of doctor and hospital and an end to insurance company and HMO dictates over patient care.

Pays for itself by eliminating wasteful private insurance administration and profit. A progressive tax would replace what is currently paid out-of-pocket.

Controls costs so benefits are sustainable through negotiated physician fees, global budgets for hospitals and bulk purchasing of prescription drugs and medical supplies. A single-payer system would facilitate health planning to reestablish the balance between preventive and primary care on one hand, and high-tech tertiary care on the other.

The nation should not look to Massachusetts’ health reform as a model. If we truly want to provide comprehensive health care for all of us at a price we can afford, we must adopt a single-payer plan.

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