Allegedly because of their lack of health insurance, uninsured Massachusetts residents commonly utilize emergency rooms as a source of primary care. EMTALA requires hospitals and ambulance services to provide care to anyone needing emergency treatment regardless of citizenship, legal status or ability to pay.
S but includes no provisions for reimbursement. EMTALA is therefore considered an "unfunded safety net program" for patients seeking care at the nation's emergency rooms. A much larger portion of the pool was used for non-ED hospital care for the uninsured and for other care at Community Health Centers.
In , MIT economics professor Jonathan Gruber predicted that the amount of money in the "free care pool" would be sufficient to pay for reform legislation without requiring additional funding or taxes. In November , political leaders began advocating major reforms of the Massachusetts health care insurance system to expand coverage.
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First, the Senate President Robert Travaglini called for a plan to reduce the number of uninsured by half. A few days later, Governor Romney announced that he would propose a plan to cover virtually all the uninsured. The coalition began gathering signatures to place their proposal on the ballot in November if the legislature did not enact comprehensive health care reform, resulting in the collection of over 75, signatures on the MassACT ballot proposal.
At the forum, the Foundation issued a series of reports on reform options, all of which included an individual mandate. The free care pool had to be restructured so that individuals, rather than institutions, received the funding. In Fall , the House and Senate each passed health care insurance reform bills. The legislature made a number of changes to Governor Romney's original proposal, including expanding MassHealth Medicaid and SCHIP coverage to low-income children and restoring funding for public health programs.
The most controversial change was the addition of a provision which requires firms with 11 or more workers that do not provide "fair and reasonable" health coverage to their workers to pay an annual penalty.
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On April 12, , Governor Romney signed the health legislation. The enacted statute, Chapter 58 of the Acts of , established a system to require individuals, with a few exceptions, to obtain health insurance. Chapter 58 had several key provisions: the creation of the Health Connector; the establishment of the subsidized Commonwealth Care Health Insurance Program; the employer Fair Share Contribution and Free Rider Surcharge; and a requirement that each individual must show evidence of coverage on their income tax return or face a tax penalty, unless coverage was deemed unaffordable by the Health Connector.
The legislation included a merger of the individual non-group insurance market into the small group market to allow individuals to get lower group insurance rates. Eventually the state's non-partisan insurance board ruled that the government did not have the actuarial data or right to freeze the premiums.
Five of the non-profit insurers then settled for slightly lower premium increases than they had initially requested rather than litigate further. The sixth litigated and won the right to implement all its original increases retroactively. Payment rates were supposed to be increased to hospitals and physicians under the statute but that has not happened.
The statute also formed a Health Care Quality and Cost Council to issue quality standards and publicize provider performance. The Health Connector is designed as a clearinghouse for insurance plans and payments. It performed the following functions:. Employers with more than ten full-time equivalent employees FTEs must provide a "fair and reasonable contribution" to the premium of health insurance for employees. The Division of Health Care Finance and Policy defined by regulation what contribution level meets the "fair and reasonable" test in the statute. The regulation imposes two tests.
Regulatory and analytic information is available on the Division's website. There was an additional Free Rider Surcharge assessible to the employer. The surcharge is applied when an employer does not arrange for a pre-tax payroll deduction system for health insurance a Section plan, or a " cafeteria plan " , and has employees who receive care that is paid from the uncompensated care pool, renamed in October as the Health Safety Net.
Residents of Massachusetts must have health insurance coverage under Chapter The Connector waiver can be obtained if the resident demonstrates that there is no available coverage that is defined by the Connector as affordable. If a resident does not have coverage and does not have a waiver, the Department of Revenue will enforce the insurance requirement by imposing a penalty.
In , the penalty was the loss of the personal exemption. Beginning in , the penalty is half the cost of the lowest available yearly premium which will be enforced as an assessed addition to the individual's income tax. Beginning July , the Connector offered reduced benefit plans for young adults up to age 26 who do not have access to employer-based coverage. In and , much more substantive changes were made to the law, one of the most important of which was to begin an open enrollment period for those receiving subsidized health insurance and anyone buying insurance, including those paying full price, as an individual.
Given the continuing overall rise in premiums post Massachusetts healthcare insurance reform,  the major goal of the amendment was to introduce price controls on health care itself; it is not directly related to healthcare insurance as are the earlier legislative actions. Starting in , Commonwealth Care insurance and Commonwealth Choice insurance for those not receiving subsidies has been replaced by insurance compatible with the federal Patient Protection and Affordable Care Act.
The implementation of healthcare insurance reform began in June , with the appointment of members of the Connector board and the naming of Jon Kingsdale, a Tufts Health Plan official, as executive director of the Connector. The federal Centers for Medicare and Medicaid Services approved the state's waiver application on July 26, , allowing the state to begin enrolling 10, people from the waitlist for the MassHealth Essential program, which provides Medicaid coverage to long-term unemployed adults below the poverty line.
The regulations provide that companies with 11 or more full-time equivalent employees will meet the "fair and reasonable" test if at least 25 percent of those employees are enrolled in that firm's health plan and the company is making a contribution toward it. A business that fails that test may still be deemed to offer a "fair and reasonable" contribution if the company offers to pay at least 33 percent of an individual's health insurance premium. Also effective in , the Connector Board set premium levels and copayments for the state subsidized Commonwealth Care plans.
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One plan will have higher premiums and lower copayments, while a second choice will have lower premiums and higher copayments. As of December 1, , around , people had been enrolled in Commonwealth Care plans. The Connector rejected those bids, and asked insurers to propose less expensive plans. New bids were announced on March 3, Copayments, deductibles and out-of-pocket contributions may vary among plans. Before the deductible applies, the proposed plan includes preventive office visits with higher copayments, but would not include emergency room visits if the person was not admitted.
The new plan covered abortions both elective and medically necessary in the heavily Catholic state. Approximately , Massachusetts residents who received free or highly subsidized CommonWealth Care insurance, will be moved to Medicaid. The number of available plans under the Affordable Care Act that will offer service beginning on January 1, , rose to more than from just under in The open enrollment period of the insurance marketplace, during which citizens may re-enroll or purchase, lasted from 1 October to 31 March , but those who did not re-enroll by December 15, were to have no insurance coverage in January unless they were among the , moved to Medicaid.
The United States Census Department shows a higher percentage of uninsured for the same years but a similar trend line. The latest U. Census data on health care insurance types in Massachusetts was released in September , and also illustrates the long-term decrease in ESI, and an increase in public, free and subsidized insurance. Demand represents the amount that providers would have been paid in the absence of a funding shortfall. The reduced state Health Safety Net payments anticipated but not realized that by reducing the number of uninsured people, Commonwealth Care would reduce the amount of charity care provided by hospitals.
The number of people with group insurance in Massachusetts held steady at around 4,, since passage of the health care reform law, according to the DHCFP. One outcome has been the unavailability of coverage by many insurers previously doing business in Massachusetts. The study found that: 1 From to , the total number of medical bankruptcies defined as due to unpaid medical bills or to loss of income due to illness, with no distinction between those causes in Massachusetts increased by more than one third, from 7, to 10,; and 2 Illness and medical costs contributed to The researchers note that the financial crisis beginning in likely contributed to the increased number of bankruptcies, and Massachusetts' increase in medical bankruptcies over the — period was nevertheless below the national average rate of increase.
Still, the researchers explain that health costs continued to go up over the period in question, and their overall findings are "incompatible with claims that health reform has cut medical bankruptcy filings significantly. This compared to Among children and seniors the coverage rate was even higher, at The breakdown of insurance coverage consisted of that The state's Secretary of Health and Human Services, JudyAnn Bigby , said, "Massachusetts' achievements in health care reform have been nothing short of extraordinary.
With employers, government and individuals all sharing the responsibility of reform, we continue to have the highest insurance rate in the nation.
Some of this doubling in cost was funded by temporary grants and waivers from the United States federal government. These premium increase do not reflect actual resident experience particularly in the merged market because Massachusetts regulations allow age and other rating factors e. In addition the state spent a substantial amount of general revenue on the insurance reform.
Massachusetts health care reform
A legal challenge was filed in the Superior Court of Essex County , contesting the fine imposed for a citizen's failure to get health insurance as well as the fine imposed for a failure to provide information on a tax return as to whether that citizen had health insurance. In general, private insurance pays medical providers more than Medicare does.
Under a Medicare for all system, Medicare would pick up all the bills. Paying the same prices that Medicare pays now would mean an effective pay cut for medical providers who currently see a lot of patients with private insurance. But if rates are too low, hospitals already facing financial difficulties could be put out of business. Neither Mr. So our estimators offered their best guess of what they thought such a plan might do. Thorpe said he picked a number higher than current Medicare prices for hospitals, because he thought anything lower would be unsustainable.
Blahous said he constructed his starting estimate at precisely Medicare rates, though he thought the real number would most likely be higher. He also reran his calculations with a more generous assumption: At percent of Medicare, around the average amount all health insurers pay medical providers now, the total shot up by hundreds of billions of dollars, about an additional 1.
Patients in the United States pay the highest prices in the world for prescription drugs. But it also reflects national preferences: An effective negotiator needs to be able to say no, and American patients tend to want access to the widest array of cutting-edge drugs, even if it means paying more. But politics would still be a constraint. A system willing to pay for fewer drugs could probably get bigger discounts than one that wanted to preserve the current set of choices.
That would mean, though, that some patients would be denied the medications they want. All of our economists thought a Medicare for all system could negotiate lower prices than the current ones. But they differed in their assessments of how cutthroat a negotiator Medicare would be. Friedman thought Medicare for all could reduce drug spending by nearly a third.
The Urban team said the savings would be at least 20 percent. The other researchers imagined more modest reductions. That change alone would increase the bill for the program. Other changes to Medicare for all would also tend to increase health care spending. Some proposals would eliminate nearly all co-payments and deductibles.
The proposed plans would also add medical benefits not typically covered by health insurance, such as dental care, hearing aids and optometry services, which would increase their use. The economists differ somewhat in how much they think people would increase their use of medical services.
The complexity of the American system means that administrative costs can often be high. Insurance companies spend on negotiations, claims review, marketing and sometimes shareholder returns.
One key possible advantage of a Medicare for all system would be to strip away some of those overhead costs. But estimating possible savings in management and administration is not easy. Medicare currently has a much lower administrative cost share than other forms of insurance, but it also covers sicker people, distorting such comparisons.
Certain administrative functions, like fraud detection, can have a substantial return on investment. The economists all said administrative costs would be lower under Medicare for all, but they differed on how much. Those differences amount to percentage points on top of the differing estimates of medical spending.
On this question, there was rough agreement among our estimators that administrative costs would be no higher than 6 percent of medical costs, a number similar to the administrative costs that large employers spend on their health plans. Blahous said a 6 percent estimate would probably apply to populations currently covered under private insurance, but did not calculate an overall rate. All of these estimates looked at the potential health care bill under a Sanders-style Medicare for all plan. In some estimates, the country would not pay more for health care, but there would still be a drastic shift in who is doing the paying.
Individuals and their employers now pay nearly half of the total cost of medical care, but that percentage would fall close to zero, and the percentage paid by the federal government would rise to compensate. Even under Mr. How that transfer takes place is one of the least well explained parts of the reform proposals. Taxation is the most obvious way to collect that extra revenue, but so far none of the current Medicare for all proposals have included a detailed tax plan.
Even if total medical spending stayed flat over all, some taxpayers could come out ahead and pay less; others could find themselves paying more. Raising revenue would require broad tax increases that are likely to be partly borne by the middle class , potentially impeding passage. Advocates, including Mr. Sanders, tend to favor funding the program with payroll taxes.
For some people, any increase in federal taxes might be more than offset by reductions in their spending on premiums, co-payments, deductibles and state taxes. There is evidence to suggest that premium savings by employers would also be returned to workers in the form of higher salaries. But, depending on the details, other groups could end up paying more in tax increases than they save in those reductions. After Mr. But it found that the proposed taxes would pay for only about half of the increased federal bill.
That means that a real financing proposal would probably need to raise a lot more in taxes. How those are spread across the population would change who would be better or worse off under Medicare for all. Our economists differed somewhat in their estimation methods.
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They also examined a couple of different Medicare for all proposals, though all the plans had the same major features. Gerald Friedman calculated the cost of Medicare for all by making adjustments to current health care spending using assumptions he derived from the research literature. A paper with his analysis of several different variations on Medicare for all is available here.
Thorpe calculated the cost of Medicare for all by making adjustments to current health care spending using assumptions he derived from the research literature.