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Access to Affordable, Quality, Accountable Health Care Act

Introduction

In April 2006, the Massachusetts implemented a new medical reform aimed at providing accessible, affordable and quality health care to a wider coverage in the state. According to Angell, it was, “… set out to cover the 500,000 to 750,000 uninsured residents of the state, and to see that the coverage for everyone else met a minimum standard,” (A16). Its main idea of how to provide this was through the use of insurance among all the people. The act provided several provisions that were required of everybody in the state.

What are the main provisions of this law?

This act established the commonwealth health insurance, “The legislation established a new state agency, the Commonwealth Health Insurance Connector, which would try to make sure insurance was affordable and met the minimum standard and which would also determine the level of subsidies,” (Angell A15). The program provides the subsidy of insurance as required and it had no deductibles or premiums for the poor. This connector was responsible for providing small medical businesses with plans, setting subsidy levels and allowed premiums to workers from their employees on part-time. The connector was supposed to come up with valuable plans that are supposed to administer and enable businesses to provide affordable coverage to employees through allowing payments in pre-tax dollars, hence reducing costs.

The new law aimed at expanding the insurance partnership program that provided the subsidy to small businesses to achieve the coverage through making several changes. Some of these provisions were to increase the eligibility of the program through raising the income for employees from 200% to 300% above the federal poverty level. It added that employees whose employers have not provided insurance for the last six months or those not qualified for coverage as the only ones eligible to take part in the program. The law added that a prohibition that prohibited double subsidy for self-employed people specifying that they can only apply for employee subsidy but not together with employer’s subsidy (Joint Committee on Health care Financing, 2011).

The act also created a new commonwealth care health insurance program, which would provide subsidized insurance for the residents of the state, and would be controlled by the connector. This was aimed at people who did not receive medical insurance from their employers and to those it is not subsidized. One of the provisions provided that coverage would be expanded through providing medical insurance to all those that earned below the federal poverty level. Those earning about three times of the poverty level would receive partial subsidization of medical insurances, while others would have to buy their insurance, which was a compulsory requirement failure to which, a stiff fine would be considered. This was meant to ensure that everybody in the state had a medical insurance that would cater for his or her medical needs when needed (Angell A15)

The act provided a fair share contribution designed to distribute the burden of financing the free medical care among all the employers with a permanent workforce of ten or more employees equally. Those employers who made a good reasonable contribution were exempted from the fair share contribution, and meeting this standards required employers to provide health insurance to the employees, at least a quarter of the permanent employees. However, if an employer provides 33% of the premiums, and does not meet the minimum requirement of 25%, the employer would be regarded as a contributing one. Those who did not meet this were required to pay $295 per employee (Joint Committee on Health Care Financing, 2011).

The employers, as provided by the new law, in order to achieve accessibility to affordable insurance, would have to abide to three requirements. One of the requirements is the cafeteria plan, which is under the federal law and allows employers to pay for health coverage in pre-tax dollars, hence he or she is not mandated to pay premium costs but have to file a copy with the connector. The other requirement is a coverage statement, which under the new law requires that Massachusetts residents should purchase the affordable insurance products. The employer is required to provide the employees that it insures with a statement that gives details of the employee that would be used to show compliance to the tax system. The last requirement, the free rider surcharge, provides that non-providing employers with more than ten employees may have to pay a portion of the incurred costs by the state in providing free care. Employer are only free from this if the provide cafeteria plan, covers employees seeking care and participates in insurance partnership programs. An employer would be charged a certain percentage of the costs incurred by the state in providing free care to employees of a non-providing employer (Joint Committee on Health Care Financing, 2011).

Why was it adopted?

One of the main reasons it was adopted is due to its focus on expanding health care to the people who were below poverty and increasing coverage, which meant health care for all (Steinbrook, expanding coverage 2758). The increasing cost of medical care is tremendous and a system that would see access of affordable health care is welcome in all states. “The system now costs twice as much per person as those of other advanced countries and delivers worse average outcomes. It prices tens of millions of people out of health coverage altogether and limits care for countless others,” (Angell A15). This has been a major reason for seeking ways of making health care affordable to almost all, if not all American citizens. The Massachusetts’ reforms aim at giving subsidies to its residents especially the poor to assists them afford the expensive health care. It does not aim at reducing cost, which has made it successful since many of the residents irrespective of economic status can access insurance health care. It is aimed at providing quality care to its residents and using cost sharing as a way of financing it.

How well has it worked?

The program has achieved its goal of covering more people with health care insurance. According to Keiser Commission (2011), the state has accessed about 6.7 million from about 750 employers who did not pay for insurance before but now do. This is one of the successes achieved from the employers by the state. In covering for the uninsured, several sources indicate that the number of those insured in Massachusetts has increased by over 340.000 since it was enacted. The commonwealth care programs worked successfully in ensuring that those who fell under poverty were enrolled automatically, a means that saw a part of its success. In April 2008, the enrollments were above the expected estimates by more than 30,000. Individual coverage increased to about 10,000 people, adding to the success (Kaiser Commission, 2011). Expansion of mass health was also achieved after Medicare program that covered children coming from families of three times above poverty level were insured (Widmer R8). This increased the number of enrollment by a big margin. The program has been quite successful since its objective of expanding the coverage to all people has been achieved beyond expectation (Helman A1).

However, there are several disadvantages to it. One of the challenges that are faced by the program is the high rising costs, which are beyond the expectations. This has been due to the success of enrollment, which means that increased enrollment leads to increased costs of insurance. More people enrolling means more costs for subsidies and this consequently raises the cost. The rising costs are making it hard for the state to maintain the cost of insurance subsidies. This will mean more costs for those who enrolled since the level of cost keeps rising. The state is not sure of maintaining the program as it is and might have to make changes (Raymond, 2011).

According to Angell (A17), trying to reduce costs will mean reducing coverage of health care to the poor citizens who cannot afford it. In Massachusetts, the reforms meant more expenses for the state to finance the insurance systems that would cover more people. “If the system stays essentially as it is and we try to expand coverage, costs will inevitably rise. On the other hand, attempts to control costs will inevitably reduce coverage,” (Angell A15). During the first year of its enacting, the number of residents of low income accessing the subsidized insurance grew by 122,000, which was almost a third of the uninsured residents 2006.

What lessons might the federal government learn from the Massachusetts experience?

One of the lessons the federal government can learn from this act is that giving the citizens a mandate to purchase health insurance is possible if it is not meant to reduce cost. In Massachusetts, the mandate of individuals purchasing health care insurance was facilitated by the subsidy that was provided by the state through finance from employers and tax. This meant spending more to insure the residents, but its objective of covering more people was met, and employers did not have to drop the health plans that they funded there before the state-run insurance pool came since its enactment provided for employers to take part in funding it (The Christian Science Monitor, 2011).

Conclusion

Health care costs cannot be reduced through mandating individuals to pay for insurance. In the case of Massachusetts, the costs went higher since financing the insurance and making it affordable to lowly earning residents was required. Angell (A17), states that costs increased largely due to the subsidies offered by the state. It is also clear from the Massachusetts experience that it is easier to expand coverage of health care than it is to reduce its costs since the new law was able to achieve its goal with ease through subsidies. This means that expansion and cost reduction cannot be achieved together at the same time since expansion means incurring more costs (Turner R8). Reducing costs will block many people from accessing health care since it means individuals bearing their costs without help from the states. The federal government can learn from Massachusetts that it is the responsibility of the government to provide affordable services to its people irrespective of economic background, especially when it comes to social amenities such as health care.

 

Works Cited

Angell, Marcia. “Health Reform You Shouldn’t Believe In,” The American Prospect, May 2008, A15-18. Print.

Helman, Scott. “Lobbyists Took in $7.5m on Health Bill; Industry Boosts Spending by Third,” The Boston Globe, April 5, 2006, A1. Print.

Joint Committee on Health Care Financing. The Health Care Reform Law, Chapter 58 of the Acts of 2006: How the Law Affects Employers. 31 Oct 2006. Web. 11 April 2011.

Kaiser Commission. Massachusetts Health Care Reform: Two Years Later. May 2008. Web. 11 April 2011.

Raymond, Alan. Health Care Reform Law: Progress and Challenges after One Year of Implementation. May 2007. Web. 11 April 2011.

Steinbrook, Robert. “Health Care Reform in Massachusetts – A Work in Progress,” The New England Journal of Medicine, May 18, 2006: 2095-2098. Print.

Steinbrook, Robert. “Health Care Reform in Massachusetts: Expanding Coverage, Escalating Costs.” The New England Journal of Medicine, Jun 2008, 358(26): 2757-2760. Print.

The Christian Science Monitor. What lessons Massachusetts holds for US healthcare reform. n.d. Web. 11 April 2011.

Turner, Grace. “Costs Keep Rising” The Wall Street Journal, October 27, 2009, R8. Print.

Widmer, Michael. “A Great Success,” The Wall Street Journal, October 27, 2009, R8. Print.