Health care for (almost) everyone

[ Winter 2008 ]

Massachusetts’ Bold Experiment 
Heart disease. Cancer. Uninsurance. If not having health insurance were a disease, it would rank as the third-leading cause of death in Americans ages 50 to 64, according to one 2004 Health Affairs study. Many in this age group walk a tightrope, too old to be totally healthy, too young for coverage under Medicare, and not poor enough to qualify for Medicaid. But no matter the age, the 47 million U.S. uninsured take risks every day, having no health or financial safety net.

That’s why Massachusetts and a handful of other states have started a new wave of reforms that make expanding health care coverage a top priority. More than 18 months after Massachusetts’ landmark legislation mandated that nearly every resident have quality health care insurance that is affordable, how is this bold experiment doing? Might state-led reforms like this one succeed where a federal proposal in the 1990s failed? What lessons might other states draw?

“It seems like we only have an appetite for health care reform in this country about every 10 years,” observes Nancy Turnbull, an associate dean for educational programs and senior lecturer on health policy at the Harvard School of Public Health (HSPH) and one of 10 members of the board of the Commonwealth Health Insurance Connector Authority, which is charged with putting much of the law into action. “We have an incredible opportunity now. I just want to get as many people covered as possible.”

Turnbull is one of several HSPH experts involved in this massive undertaking, which has been funded in part by redirecting money that Massachusetts previously allocated to various health care safety net programs. In this article, she and four other faculty members working on this dynamic experiment discuss what it took to pass a statute that gets all the key players—insurers, business, and individual citizens—to share responsibility. Already there are lessons to absorb, and obstacles on the path to insuring every resident at a cost taxpayers will tolerate.

High Cost of Uninsurance
Insurance can mean the difference between a life of health and one of illness and disability. People without insurance can die prematurely because they don’t get good care, they don’t get preventive care, they don’t get enough care, and they wait too long before seeking care out.

The uninsured are not just the poor; they are also the middle class. It’s your neighbor who is self-employed, but can’t afford the high premiums required by the non-group insurance market. It’s the young adult just out of college whose job doesn’t offer health insurance, and who no longer qualifies for her parents’ plan. It’s the older adult who has lost his job but is not yet qualified for Medicare. It’s the employee of a company that can no longer afford to offer health coverage or has cut back its subsidy.

Massachusetts’ Chapter 58 of the Acts of 2006 won’t pull everyone under its protective umbrella. But as the ranks of the uninsured swelled to almost eight percent of the population—and as the state legislature faced pressure from consumer advocates, as well as potential cuts in federal funding for Medicaid—the time was right for crafting a solution. Following are the key ways in which the law aims for “near universal” coverage (see sidebar on page 10 for details):

  • Expansion of the state’s Medicaid program to include at least 25,000 more children from low-income families, and to restore cuts to the program made in 2001;
  • Subsidized coverage for low-income adults, those whose annual income is less than three times the federal poverty level (three times is about $31,000 for an individual and about $62,000 for a family of four);
  • Changes to the insurance market, including the merging of individuals and small businesses into one group with real buying power; creating Young Adult plans; and allowing children to stay on family policies until age 26, if necessary;
  • Mandated coverage, a requirement unprecedented in the United States that all adults over 18 purchase health insurance if “affordable” coverage is available to them; deadline is end of 2007. Adults must pay increasing penalties for failing to do so each year thereafter, unless they can document that no plan is affordable to them;
  • New responsibilities for businesses with 11 or more employees, which must offer health insurance or pay a penalty of up to $295 per full-time employee annually.

How’s it Going?
As of November 2007, about 200,000 people had enrolled in the state’s array of affordable and subsidized insurance programs. That’s out of more than 500,000 who are uninsured, Turnbull notes. Passing the law was challenging, she says, “but in many ways the most challenging couple of years are ahead. We still have lots of people to find and enroll, and we have to find sustainable ways to fund these expansions.”

As one of many behind-the-scenes people designing the plan and pushing for the law, Turnbull is now front-and-center in making it work. Named to the board of the Commonwealth Health Insurance Connector Authority (the “Connector”) last spring, she’s helping to oversee the effort to connect eligible residents with affordable insurance plans. The Connector sets policy on what health services should be covered and what is “affordable” at varying income levels. It also approves and administers enrollments in a new state-subsidized program, and in a wide range of new lower-cost private health plans.

A major issue, Turnbull acknowledges, is whether the non-subsidized policies and even the subsidized policies truly are affordable. “People really struggle,” she says. “We can’t underestimate that for some people, even $35 a month is a lot of money.” Striking a balance between comprehensiveness of coverage and affordability has been a big challenge. Requiring insurance plans to cover a wide range of benefits, including prescription drugs (required by January 2009) means that some plans will have deductibles as high as $2,000 for individuals and $4,000 for families.

Not surprisingly, most people who signed up for plans early on qualified for free or subsidized plans. According to Turnbull, this has already reduced health care providers’ reliance upon the state’s Uncompensated (“free”) Care Pool, which is now funded by the state, the federal government, and surcharges on health insurers and hospitals. This safety net of funds, up to $700 million a year, compensates hospitals and community health centers for services they provide by law to eligible uninsured people. The new insurance plans’ success will depend on redirecting most of the Uncompensated Care Pool’s funds into subsidizing health insurance for those previously uninsured. Eligibility rules for this “free care pool” have also been tightened to encourage people to enroll in health insurance rather than rely on free care.

The Cost Conundrum
Ask anyone who worked hard to pass this law what worries them most, and the answer comes quickly: finances. Cost, and compromise, are first and foremost why somewhere along the rocky, arduous path to passage, the law’s goal became “nearly universal” instead of “universal” coverage.

With the cost of health care coverage rising by double-digit percentages, the sustainability of a plan like Massachusetts’ is a big question mark. Its funding relies on continued federal commitments to Medicaid, on redirecting money the state already spends on uncompensated care, and on drawing about $400 million each year from the state’s general funds. When Nancy Turnbull urged attendees at a recent forum on the law at HSPH to “Pray for a strong economy,” she wasn’t kidding.

“It’s a fair question to ask: How we can hope to succeed at covering most of our residents without also containing costs?” says lawyer Christie Hager, who was deputy director of the Division of Public Health Practice at HSPH when, at the end of 2004, she was lured to the Massachusetts legislature to be chief health counsel to Salvatore DiMasi. He had just been elected speaker of the House.

“We knew we would have to address cost containment at the next stage,” says Hager, who retains an instructor post at HSPH, “but we also knew it would be very difficult to rally around a common solution unless we first had a plan to cover everyone.” The law addressed cost containment in part by creating the Massachusetts Health Care Quality and Cost Council. The council oversees efforts to improve quality of care and control costs, and for eliminating disparities in health between prosperous whites and minority and low-income residents.

Political Will for Change
The new law is actually “the third wave” of health care reform in Massachusetts, according to HSPH adjunct lecturer John McDonough. McDonough served for 12 years in the Massachusetts House of Representatives, where he co-chaired the Joint Committee on Health Care. He says that two statutes passed in the 1980s and ‘90s laid a foundation by expanding Medicaid eligibility and establishing the Uncompensated Care Pool, which only four other states have (Maryland, New York, New Jersey and Connecticut). Massachusetts also has some of the strictest rules for “guarantee issue” regulations, which prohibit private insurers from turning away anyone with a pre-existing medical condition.

This time around, three forces built up momentum for change, McDonough says, converging and ultimately resulting in the law’s passage. In 2003, McDonough became executive director of the consumer advocacy group Health Care for All. Its members started a coalition called Affordable Care Today (ACT), which filed legislation and got a ballot initiative going to goad legislators into action. Meanwhile, the Blue Cross Blue Shield Foundation, which Nancy Turnbull later headed, had just launched a project called Roadmap to Coverage to develop policy options for achieving universal coverage. At around this same time, Massachusetts’ then-governor Mitt Romney was developing his own proposal to revamp the state’s health care system.

In 2005, the Massachusetts legislature took up the charge for reform, backed by leaders of the Senate and House. An additional spur was that Massachusetts then faced forfeiting $458 million in Medicaid funds if it didn’t decrease the numbers of uninsured. The hiring of Hager, who had been a legislative analyst during the “second wave” of reform, was a signal that Representative DiMasi was pursuing health care reform seriously.

Hager became the “general contractor,” as she puts it, to the law that Massachusetts built, working with a joint legislative committee to hammer out one law from three proposals. Most exciting, she says, was “the political will that carried this law through passage and implementation.”

Middle-Class Clout
Another factor that has made these times ripe for health reform is the clout of middle-class voters, who constitute one-third of America’s uninsured. As HSPH Professor of Health Economics and Policy Katherine Swartz points out, today there are “a lot more entrepreneurial, self-employed people being hired on a contract basis, without fringe benefits.” This is particularly true in Massachusetts’ service and technology-based economy, says Swartz, an economist who has studied the problem of the uninsured for 25 years.

“This is the way larger companies are holding costs down,” says Swartz, author of the 2006 book Reinsuring Health: Why More Middle-Class People are Uninsured and What Government Can Do. “When we hear that 99 percent of large companies offer health insurance, it doesn’t take these people into account.”

Lessons for Other States?
Several other states are helping to lead the way in finding strategies for covering their uninsured. Maine and Vermont have passed reforms tailored to their economies and demographics, while Illinois and Pennsylvania have expanded insurance for children. Governor Arnold Schwarzenegger has garnered much attention for his plan to overhaul health care in California, where 20 percent of residents are uninsured. Almost every state is talking about some type of change. But each state faces a unique set of political hurdles to making health care more equitable in a no-new-taxes environment.

Hager, asked to speak all across the country, finds that the Massachusetts law “has sparked terrific conversation and energy about what can be done at the state level.”
Turnbull has talked to groups in two dozen states. “I generally tell them each state starts with its own landscape, history and politics, but that every state can make a significant step,” she says. In many states, just trying to enroll everyone who is eligible for Medicaid will help, she says.

“My advice to other states is to bring together different stakeholders, like we did,” suggests Turnbull. One proviso: “Ultimately, states can’t solve this problem alone and it will require a federal solution, using federal dollars.”
“It’s not all or nothing,” says John McDonough. “Any step is a step in the right direction.”

Presidential Bandwagon
Most of the 2008 presidential candidates have laid out reform platforms, and some, including those of Democrats John Edwards and Hillary Clinton, are very similar to Massachusetts’. “It’s absolutely clear that the law here is having an effect on the presidential race,” says Turnbull.

But let’s keep this in perspective, says Robert Blendon, HSPH professor of Health Policy and Political Analysis, and a pollster who analyzes public opinion on health issues. “Although health care reform is the top domestic issue on people’s minds, the war in Iraq is overwhelmingly the top issue,” he says. Blendon does acknowledge, however, that the fate of the Massachusetts plan is “extraordinarily important,” considering that several of the candidates based at least part of their plans on it, such as the mandate that everyone purchase insurance.

Isn’t it a bit premature to latch onto an experiment before the results are in? “Yes, but this isn’t the School of Public Health, where you’d want to do an experiment first, then evaluate how it’s working before you adopt it,” he points out. “In politics, you get an idea, it sounds good, and you run with it.”

Small Victories
A public opinion poll Blendon conducted in Massachusetts in June 2007 with the Kaiser and Blue Cross Blue Shield foundations showed strong support for the law. “But there is still concern about the mandate that everyone have insurance,” Blendon says. “Our data reflected the nervousness people felt about what the mandate meant to them personally.”

Across the state, many groups are aggressively seeking and assisting people to sign up for insurance. Health Care for All fields 150 to 200 calls or emails a day. “Every day we see the rewards of our advocacy, and that keeps us going,” says McDonough. “I am an optimist. If we sign up 20 to 30 people each day, we’re making progress.”

Ellen Barlow has been writing about personal and public health for more than 25 years, including 15 years as a writer and editor at Harvard Medical School.