Massachusetts health reform required state residents to procure health insurance
The Massachusetts legislature made national history in 2006 by passing its ground-breaking mandatory health insurance law. The law was the first of its kind in the country, and it put the state at the forefront of the national health care debate, Supporters said it made huge strides in decreasing the number of people in the state without health insurance. Critics questioned statistics used to make such claims, and pointed out that a government mandate set up what the Cato Institute called "perverse" incentives for companies and individuals to participate in the program, thus taking free market competition out of the equation and setting up a situation that could only artificially inflate prices. Whatever the verdict on the program's success, its implementation has changed the national perception of health care reform.
The Law
The Massachusetts health reform act contained several different components, all geared toward increasing the number of people in the state who had health insurance coverage. It expanded Medicaid, provided government subsidies, and attempted to reform the health insurance market. But among its most controversial measures was a requirement that any resident over age 18 and in an income bracket deemed capable of paying for health insurance obtain coverage.
Requirements
Residents who cannot prove they have a plan that meets the state's requirements must pay a monthly fine equal to 50 percent of the least costly, available insurance premium that meets state standards. The state provides an online calculator to help residents determine if they meet exemptions, in which case they need to apply for waivers, at https://www.mahealthconnector.org, the Web site for the independent agency designed to help residents adapt to the new law. The regulations also require employers with more than 50 employees to provide insurance or pay what the state terms a "fair share" assessment of $295 per employee every year.
Supporters
State statistics show the law has exponentially reduced the number of insured people in the state, with the number of uninsured dropping from 11 percent in 2005 to less than 3 percent in 2009. A 2010 study published in the Millbank Quarterly reported that the legislation was responsible for 409,000 newly insured residents, most notably people who were eligible for Medicaid before the reform but decided to sign up only after workers who had not previously taken up their employers' health insurance offers. The study, by Brandeis professors Michael Doonan and Katherine Tull, also found that the mandate had increased health insurance options for many employees, mainly because employees whose companies don't offer health insurance can deduct their premiums from their wages on a pre-tax basis. Public support of the mandate, however, has been mixed. A report commissioned for the Blue Cross Blue Shield Foundation the year after the law's implementation found that only 52 percent of residents supported the mandate, although 64 percent approved of the law overall.
Critics
While critics don't dispute claims that the number of insured people in the state has fallen, they question whether the statistics have been inflated. Scholars at the conservative Cato institute, for example, said the number is probably closer to 5 percent. One of the critics' biggest problem with the reform, though, is that it allegedly inflates the government's role in a process they say should be left to private enterprise. Forcing residents to buy insurance, they say, removes free-market competition from the process and artificially inflates prices. One report, also published by the Cato Institute, said that the mandate had boosted the costs of insurance in the state to $133 million in 2007 to an estimated $800 million by the end of 2009.
National Impact
Former Massachusetts governor and onetime Republican presidential candidate Mitt Romney famously insisted that the state reform, which he implemented, had nothing to do with the national plan championed by President Obama three years later. But the Massachusetts model is widely considered to have been an inspiration for national reform, and the two proposals have several similarities. Most notably in the context of this article, the federal plan imposes fees for individuals who do not procure insurance, The Boston Globe reported in a March 2010 article that the federal fees would be substantially lower than those imposed by the state, however. The maximum state fees for the uninsured in 2010 were $93 for each month a person does not have coverage, totalling $1,116 a year. The federal plan, the Globe reported, would start with fees of $95 a year in 2014. By 2016, those fees would rise to either a flat annual fee of $695 or 2.5 percent of an uninsured person's annual income, whichever is greater.
Tags: health insurance, people state, federal plan, fees would, found that, Globe reported
