Massachusetts Health Insurance Requirement Goes Into Effect

A Massachusetts law that requires all state residents to obtain health insurance took effect Sunday, USA Today reports (Appleby, USA Today, 7/2).

Under the law, residents with annual incomes below the federal poverty level are eligible for no-cost care. Residents with annual incomes up to three times the poverty level can enroll in state subsidized plans, while those with incomes more than three times the poverty level can choose their own coverage from new, lower-cost private plans if they are not offered coverage through their employer (LeBlanc, AP/Long Island Newsday, 6/30).

Officials estimate that 60,000 people will be exempt from the insurance requirement because they will not qualify for subsidies but will not be able to afford other coverage options (Belluck, New York Times, 7/1).

According to the Christian Science Monitor, there "is no reliable data on how many people have bought unsubsidized insurance since the law was passed," but "analysts agree it's nowhere near 100% of those who were required to have it by Sunday" (Huang, Christian Science Monitor, 7/2).

State officials say about one-third of state residents who were uninsured a year ago, or about 130,000 people, obtained coverage by the deadline. Most of those residents had annual incomes low enough to qualify for state subsidies (New York Times, 7/1).

AP/Long Island Newsday reports that the "far more challenging task is persuading the estimated 160,000 still uninsured residents not eligible for subsidized plans to pay monthly premiums" (AP/Long Island Newsday, 6/30). Experts say many people have not signed up for coverage because they "are only vaguely aware of the law, ... and don't know much about it" (Christian Science Monitor, 7/2).

While July 1 was the deadline for residents to sign up for insurance, residents have until Dec. 31 to obtain coverage before they face a financial penalty.

Residents who do not have health insurance by that time will lose their state tax exemption, worth about $219. Those who do not obtain insurance after Dec. 31 will face a penalty of up to half the cost of insurance premiums for each month a person is uninsured. In addition, residents initially can purchase any insurance plan they choose, but by January 2009, all residents must have prescription drug coverage.

The Times reports that Massachusetts is "deliberately taking things slowly." Jon Kingsdale -- executive director of the Commonwealth Health Insurance Connector Authority, the state agency overseeing implementation of the law -- said he expected insurance enrollment to be gradual, adding that "nothing short of magical is going to happen on July 1" (New York Times, 7/1).

Leslie Kirwan, chair of the Connector Authority board, said, "July 1 is really a call to action. We are looking to insure people, not penalize them" (AP/Long Island Newsday, 6/30).

However, "some analysts [are] wondering whether Massachusetts will be able to keep funding the $1.6 billion-a-year program if the economy slumps or if costs rise substantially over the next few years," the Washington Post reports.

Kathy Swartz, a professor at the Harvard School of Public Health, said, "Affordability is the big question here," noting that even those with a basic plan would face high deductibles (Lee, Washington Post, 7/1).

The success of the Massachusetts insurance law "rests in large measure on the response of healthy young people," the Boston Globe reports.

Residents ages 19 to 39 make up about half of the state's uninsured population, according to a state survey conducted last year. If they do not enroll in health plans, "the total cost of the program could soar, because those with coverage would be older, sicker and more likely to require costly services," according to the Globe.

According to a June poll of Massachusetts residents designed and analyzed by researchers at the Kaiser Family Foundation and the Harvard School of Public Health, with input and review from Blue Cross Blue Shield of Massachusetts Foundation, 21% of people age 18 to 34 said they knew nothing about the law. After specifics of the law were explained, 38% of young people said they thought the law would help them personally, according to the poll (Dembner, Boston Globe, 7/1).

The Connector Authority has worked with private insurers to create young adult plans with premiums ranging from $106 to $220 per month. The plans are available to residents ages 19 to 26 who have annual salaries of more than $30,630, do not have health insurance through work or school, are not covered by a parent's plan and do not qualify for subsidized care. The state also has launched an advertising campaign -- including a series of newspaper and television ads and opinion pieces in college newspapers -- designed to educate young adults about the new insurance plans (Pratt, AP/Long Island Newsday, 7/2).

However, premiums could increase if "few young and healthy residents sign up, and the state could face larger-than-expected costs to provide free and subsidized care," USA Today reports.

Gov. Deval Patrick (D) said, "Failure is not an option," adding, "Instead of declaring defeat if we don't get the young and healthy to sign up, we need to examine why" (USA Today, 7/2).

Larry Levitt, vice president of the Kaiser Family Foundation and editor-in-chief of kaisernetwork.org, said, "If you're young and healthy, it's not at the top of your mind. Young people frankly don't think about catastrophic coverage and don't think about access to the system for routine coverage."

John McDonough, executive director of Health Care for All, said, "If you're living paycheck-to-paycheck, you're paying off student loans, paying rent, you're in a different situation from someone who isn't already burdened by debt."

Andrew Cohen of The Access Project said, "Many of these young adult plans aren't real insurance. The real reason for insurance is to protect you from financial burden, and these plans don't do that" (AP/Long Island Newsday, 7/2).

The success of the Massachusetts insurance initiative "could have an impact across the nation, as lawmakers in several states and Congress search for ways to provide insurance to the nation's growing number of uninsured -- now estimated at 44.8 million," USA Today reports.

California Gov. Arnold Schwarzenegger (R) and Democratic presidential candidates former Sen. John Edwards (N.C.) and Sen. Barack Obama (Ill.) all have proposed plans to cover the uninsured using elements of the Massachusetts law.

Paul Ginsburg of the Center for Studying Health System Change said, "The whole country is watching Massachusetts. Whether it can succeed with an individual mandate will shape what happens at the federal level in 2009."

Drew Altman, president and CEO of the Kaiser Family Foundation, said individual health insurance mandates have "gained currency in the past few years." According to Altman, "Some people don't like the idea of forcing people to buy insurance. Others like it because they like the idea of individual responsibility, or they see it as a way to get close to universal coverage." Altman added, "This it the first test. No one knows whether the guy working in a store in Lowell, when faced with this mandate, will say, 'I'm going to sign up and buy that policy' or 'Hell, no, I'm going to move to New Hampshire'" (USA Today, 7/2).

• Boston Globe: Although the law technically took effect on July 1, the date "really marks an intensification of a process of education, for both consumers and health plans, on buying insurance and keeping it affordable," a Globe editorial states, noting that penalties do not take effect "until after the first of 2008." According to the editorial, a recent poll showed that 55% of people who were uninsured at some point during the past year "did not think the law would benefit them," adding, "These are the very people it was written to help." The Globe concludes, "If the Connector can stabilize premiums, the advantages of health insurance will be easier to grasp" (Boston Globe, 7/1).
• Laurie McGinley, Wall Street Journal: "While Massachusetts was the first state to pose an 'individual mandate'" for health insurance, "it's unlikely to be the last," McGinley writes in the Wall Street Journal. Supporters "say an individual mandate is essential to reaching the goal of universal, or near-universal, coverage because without it" the insurance pool will be "dominated by older, sicker people, with steadily rising -- and ultimately unaffordable -- premiums," according to McGinley. She notes that some "liberals and labor groups say the rule unfairly dumps financial responsibility for insurance on individuals, when it should rest either with the government ... or with employers." She continues, "On the other end of the spectrum, Michael Tanner, the Cato Institute's director of health and welfare studies, decries the mandate as 'an unprecedented invasion of individual liberty'" (McGinley, Wall Street Journal, 6/30).
  

American Public Media's "Marketplace" on Thursday reported on the Massachusetts program. The segment includes comments from Christina Severin, executive director of Network Health; Kingsdale; Paul Hattis, a professor of health policy at Tufts University; and Deborah Enos, president and CEO of Neighborhood Health Plan (Palmer, "Marketplace," APM, 6/28). Audio and a transcript of the segment are available online.