Chapter 58:Chapter 58: The Basics of The Basics of Massachusetts Massachusetts Health ReformHealth Reform

John E. McDonough, DrPH, MPAJohn E. McDonough, DrPH, MPAHealth Care For All (Health Care For All (www.hcfa.orgwww.hcfa.org))May, 2008May, 2008

Brief History of MA Health Brief History of MA Health Reform:Reform:

Continuous Policy ImprovementContinuous Policy Improvement Eight Key Statutes: 1985 to 2006Eight Key Statutes: 1985 to 2006 Three major ones – 1988, 1996, 2006Three major ones – 1988, 1996, 2006 Continuous Policy ImprovementContinuous Policy Improvement

Medicaid/MassHealth Expansions, 1988, 1996, 1997Medicaid/MassHealth Expansions, 1988, 1996, 1997 Uncompensated Care Pool (now Health Safety Net Trust Fund), Uncompensated Care Pool (now Health Safety Net Trust Fund),

1985, 1988, 19971985, 1988, 1997 Small Group Reform/Nongroup Market Reform, 1991, 1996Small Group Reform/Nongroup Market Reform, 1991, 1996 Patient Bill of Rights, 2000Patient Bill of Rights, 2000

1988: Universal Health Care Law1988: Universal Health Care Law $1680 Pay or Play Employer Mandate$1680 Pay or Play Employer Mandate

Delayed three times/Repealed 1996Delayed three times/Repealed 1996 CommonHealth, Student Insurance Mandate, Medical Security Plan, Healthy CommonHealth, Student Insurance Mandate, Medical Security Plan, Healthy

Start Start 1996: Chapter 203/MassHealth Waiver1996: Chapter 203/MassHealth Waiver

Medicaid->MassHealth; Enrollee growth from 670,000 (’95) to 1,020,000 (’01)Medicaid->MassHealth; Enrollee growth from 670,000 (’95) to 1,020,000 (’01) Uninsurance Drop: 680,000 to 365,000Uninsurance Drop: 680,000 to 365,000 Coverage for all children – Children’s Medical Security PlanCoverage for all children – Children’s Medical Security Plan Senior Pharmacy ProgramSenior Pharmacy Program

Both reform waves inspired national actionBoth reform waves inspired national action 1988 Leads to state-based innovations1988 Leads to state-based innovations 1996 Leads to Creation of SCHIP1996 Leads to Creation of SCHIP

The Power of The Power of IncrementalismIncrementalism

Chapter 58 (1) – Insurance Chapter 58 (1) – Insurance Connector, Commonwealth Connector, Commonwealth

Care & ChoiceCare & Choice Commonwealth Health Insurance Connector Commonwealth Health Insurance Connector

Authority – 10 member boardAuthority – 10 member board Three principal responsibilities -- Three principal responsibilities -- Commonwealth CareCommonwealth Care (subsidized <300%fpl) (subsidized <300%fpl)

Subsidized coverage for uninsured with no other optionsSubsidized coverage for uninsured with no other options No premium <150%fpl; sliding scale 150-300% fpl; Co-paysNo premium <150%fpl; sliding scale 150-300% fpl; Co-pays

Commonwealth ChoiceCommonwealth Choice (non-subsidized >300%fpl) (non-subsidized >300%fpl) Private plans for uninsured >300% fpl and small employersPrivate plans for uninsured >300% fpl and small employers

Define “Define “affordabilityaffordability” for individual mandate and ” for individual mandate and “minimum creditable coverage”“minimum creditable coverage”

Chapter 58 (2) – MassHealth Chapter 58 (2) – MassHealth Expansions and RestorationsExpansions and Restorations

MassHealth:MassHealth: Kids’ coverage from 200 to 300% fpl ($63K family Kids’ coverage from 200 to 300% fpl ($63K family

of 4)of 4) MassHealth enrollment caps lifted MassHealth enrollment caps lifted

Essential, CommonHealth, HIVEssential, CommonHealth, HIV Optional Benefits Restored: dental, dentures, Optional Benefits Restored: dental, dentures,

eyeglasses eyeglasses New smoking cessation and wellness benefitsNew smoking cessation and wellness benefits $3.5M outreach/enrollment grants $3.5M outreach/enrollment grants $270M ($90M per year) hospitals/physicians rate $270M ($90M per year) hospitals/physicians rate

hikeshikes Pay for Performance/R/E Disparities benchmarksPay for Performance/R/E Disparities benchmarks

Chapter 58 (3) – Chapter 58 (3) – Individual & Employer Individual & Employer

ResponsibilityResponsibility Individual ResponsibilityIndividual Responsibility Beginning 7/1/07, all 18+ must obtain health insurance Beginning 7/1/07, all 18+ must obtain health insurance Penalties if “affordable” coverage availablePenalties if “affordable” coverage available 2007: loss of personal tax exemption if no coverage by 2007: loss of personal tax exemption if no coverage by

12/31/0712/31/07 2008: tax penalty= up to $76 per month or $912 per year2008: tax penalty= up to $76 per month or $912 per year 2009 and Beyond: to be determined2009 and Beyond: to be determined

Employer ResponsibilityEmployer Responsibility ““Fair Share” Employer ContributionFair Share” Employer Contribution

Employers (11+ FTE workers) must pay $295 annually per Employers (11+ FTE workers) must pay $295 annually per uncovered workeruncovered worker

Employers 11+ must create Section 125 “cafeteria Employers 11+ must create Section 125 “cafeteria plans”plans”

““Free Rider Surcharge”Free Rider Surcharge” Non-offering Employers (11+ workers) with frequent Non-offering Employers (11+ workers) with frequent

Uncompensated Care Pool users may be charged up to 55% of Uncompensated Care Pool users may be charged up to 55% of costs over $50Kcosts over $50K

No charge on non-offering firms with 125 plansNo charge on non-offering firms with 125 plans

Chapter 58 (4) – Insurance Chapter 58 (4) – Insurance Market ReformsMarket Reforms

Small/Nongroup Insurance Market Small/Nongroup Insurance Market ReformsReforms Individual market (60K lives) merged with Individual market (60K lives) merged with

small group market (750K lives) on 7/1/07 small group market (750K lives) on 7/1/07 – dramatic premium reductions– dramatic premium reductions

Young adults (19-25) can stay on parents’ Young adults (19-25) can stay on parents’ plans for two years plans for two years

Young Adult Plans for 19-26 year oldsYoung Adult Plans for 19-26 year olds Other ReformsOther Reforms

Quality and Cost CouncilQuality and Cost Council Sets cost and quality benchmarks; Produces websiteSets cost and quality benchmarks; Produces website

Racial/Ethnic Health Disparities CouncilRacial/Ethnic Health Disparities Council Computerized Prescription Order Entry – $5 Computerized Prescription Order Entry – $5

millionmillion

How Did It Happen? Key How Did It Happen? Key PlayersPlayers

Blue Cross Blue Shield Access FoundationBlue Cross Blue Shield Access Foundation Roadmap to Coverage Initiative/Urban InstituteRoadmap to Coverage Initiative/Urban Institute

Gov. Mitt RomneyGov. Mitt Romney Advocacy CommunityAdvocacy Community

Patients/Consumers, Providers, Labor, Business LeadersPatients/Consumers, Providers, Labor, Business Leaders Affordable Care Today Coalition (ACT!) – legislative coalitionAffordable Care Today Coalition (ACT!) – legislative coalition Ballot Initiative Committee (MassACT!) – 120,000 citizen Ballot Initiative Committee (MassACT!) – 120,000 citizen

signaturessignatures

Senate President Robert Travaglini + SenateSenate President Robert Travaglini + Senate House Speaker Sal DiMasi + HouseHouse Speaker Sal DiMasi + House *** Federal Government – 1115 Medicaid *** Federal Government – 1115 Medicaid

WaiverWaiver $385M supplemental payments at risk$385M supplemental payments at risk Breaking the “Altman Rule” – Status Quo was not an optionBreaking the “Altman Rule” – Status Quo was not an option

Business GroupsBusiness Groups

MedicareMedicaid

Employer Coverage

IndividualIndividualMandateMandate

MedicaidExpansions

EmployerResponsibility

InsuranceMarket

Reforms

AffordableProducts

Young Adult

Products

Connector

CommonwealthCare

Developed by Nancy Turnbull, Harvard School of Public Health