In 2006, Massachusetts established a broader health care system to provide universal health insurance coverage to its residents while also cutting down costs. The Massachusetts health care reform features several crucial components that expanded coverage to more than 100,000 uninsured.  The reform requires all Massachusetts adults to enroll in a health insurance plan or risk penalty, while all employers must also provide health insurance to employees or pay a penalty. Low-income adults have the opportunity to join one of the state-run Commonwealth Care plans.

Massachusetts Must Control It's Health Insurance Costs

While Massachusetts has succeeded in expanding health insurance coverage, it has not succeeded in slashing costs. As of June 2010, Massachusetts has the lowest uninsured rate in the United States at 4.8 percent, having slashed the uninsured rate by 60 percent. Compare that to the United States as a whole, where 15.4% of citizens are not covered.  Massachusetts’ efforts in expanding covered should be classified as successful.

However, the successes of broader coverage cannot hide the plan’s inability to cut costs.  The wide coverage, coupled with state subsidies and reduced rivalry between health providers, has caused costs to rise. The Massachusetts Department of Insurance has denied insurers’ demands for rate hikes in an attempt to keep expenses low for consumers. Meanwhile, insurers argue that reducing rates without slashing health provider costs places undue stress on them. Premiums have increased substantially for individuals and families, while the use of the emergency room for non-emergencies did not markedly decrease, perhaps indicating a deeper issue: the primary care physician shortage.

The similarities between the Massachusetts plan and the 2010 US Affordable Care Act make Massachusetts’ successes and failures ever more glaring on the national stage. According to a report from Fortune Magazine, both the Massachusetts and Obama plans increase health care demands without addressing health care shortages.  Prices have gone through the roof, and according to Fortune, will not decrease until the government stops targeting insurers.  Insurance pools also grow more expensive as younger, healthier members drop out while sicker members stay in.  Subsidizing middle-income plans may also prove expensive, while additional state-mandated benefits have also strained the system.  According to Fortune, Massachusetts residents have begun to manipulate the system to optimize their health insurance benefits and subsidies.

If Massachusetts can successfully manage the costs associated with its health care reform, perhaps this will bode well for the Affordable Health Care Act.  Four years into the Massachusetts plan, costs have continued to skyrocket as more residents are covered. In the current economy, controlling costs is ever more crucial to the health care industry and to the country’s economy as a whole.  Solving the primary care and health provider shortage may prove a good step in shaving down costs.

In the end, it will be the costs, not universal coverage, that determine success for both the Massachusetts and federal reform programs. I hope that both reforms can find a way to cut costs beyond placing limits on insurers, perhaps by streamlining health care overall and improving the pool of preventative

Even as federal Medicaid funds through the stimulus package dwindle, experts and state officials are collaborating on ways to identify and enroll eligible children in CHIP and traditional Medicaid this year. They are also working on similar strategies to target the millions of adults who will become eligible for Medicaid in 2014. Kaiser Health Network recently interviewed three health policy analysts for their take on how states can bring the nearly 5 million eligible but unenrolled children into the Children’s Health Insurance Program. The experts from the National Academy for State Health Policy, the Center for Children and Families at Georgetown, the Kaiser Family Foundation, and the Center on Budget and Policy Priorities enumerated several strategies states could adopt.

First, simplify Medicaid enrollment by giving states the option to enroll children automatically based on their records with other government agencies like those that administer food stamps or subsidized school lunch programs. In early 2010, Louisiana identified nearly 10,000 children via its food stamp program who were eligible for CHIP or Medicaid by not enrolled. Express lane eligibility could be expanded by developing a joint Medicaid/CHIP online application which eliminates the now-mandatory in-person interview. This expedited process is currently allowed for enrolling children under a 2009 federal law and 18 states already use it as an option. Federal law could further be changed to allow express lane enrollment for adults, especially those who will become Medicaid eligible in 2014. Creating an express lane process which applies to all Medicaid eligible individuals would encourage enrollment by lowering the barriers to entry. Eligibility terms could also be increased from 6 months to 1 year, and the process for renewing Medicaid coverage could be streamlined.

New Strategies Employed to Enroll More Children & Adults in Medicaid

States might also consider eliminating the asset test applied when determining adults’ Medicaid eligibility. This test has already been dropped for parents enrolling their children in most states. One big barrier to enrolling more of the Medicaid eligible population is the social stigma associated with being on Medicaid. Unfortunately, this stigma places Medicaid enrollees in the same category as welfare recipients. Though both these programs provide necessary services to families in need, “welfare” has taken on a negative connotation in popular culture, one which Medicaid has also acquired. In order to encourage a culture of coverage, states could rename Medicaid to something more appealing and which sounds less like a welfare entitlement. My home state of Connecticut already made such a change, renaming CHIP the “Husky” Program after our NCAA Champion UConn basketball teams.

Finally, experts suggested paying incentives to nonprofit social service agencies who help enroll children in Medicaid and CHIP. Some states including Oregon, California, Louisiana, New Hampshire, Illinois, and Indiana have had success enrolling thousands of kids via these groups using paid incentives. Any or all of these strategies could prove useful to Medicaid program administrators in the years to come as the pool of eligible individuals is set to swell tremendously.

Today is the deadline for states to submit details to the Department of Health and Human Services on how they intend to operate the high-risk health insurance pools mandated by healthcare reform. The high-risk pool program is intended to provide coverage to those who have been denied health insurance because of a pre-existing condition and who have been without coverage for more than six months. These pools are meant to bridge the gap for such individuals until subsidies and new health insurance exchanges are instituted in 2014. Other crucial reforms included in the package which brought on these pools are provisions that allow individuals to stay on their families’ insurance plans up to age twenty-six, prevent insurers from excluding children because of preexisting conditions, and eliminate lifetime limits on health costs imposed on policyholders. Twenty-nine state and the District of Columbia have elected to run their own pools and will be entitled to a portion of the $5 billion allocated by the federal government to fund them. Nineteen states said they would leave operation of pools in their states to the federal government. Some think tank analysts and state officials worry that federal funding may run out, leaving states liable to cover these high-risk patients out of their own budgets. Federal officials at the Department of Health and Human Services have assured these doubters that the funds will last for until 2014 in states where it will administer the pools. They further say the federal government will cover the costs of developing or modifying accounting or enrollment systems and any other start-up costs states may incur. The contracts due to Health and Human Services today must include strategies for operation of the pools, estimations of total cost, and other provisions. Enrollment in the pools begins July 1 and coverage for policyholders will begin August 1. For more information on the high-risk pools in your state, contact your state’s Department of Insurance.

On Wednesday June 17 the Senate Health, Labor and Pensions Committee began the public drafting of legislation that will overhaul the national health care system. This process will be a top priority for both sides of the Capitol for at least the next six weeks, if not longer. Democrat Senator Chris Dodd from Connecticut took lead over the health committee proceedings earlier in June when his close friend Senator Edward M. Kennedy became to ill due to his battle against brain cancer.

In his opening statement, Senator Dodd described how the bills will have a huge affect on all Americans and that all Americans should be entitled to enjoy good health. Senior Republican Senator Michael E. Enzi of Wyoming used his opening statement to criticize Democrats by saying their legislation efforts are a “wasted opportunity” since the committee should be trying to produce legislation that would reflect a broad consensus. Enzi also said that Democrats are rushing health care reforms along too quickly to do a good job.

Some of the main issues being discussed by the Senate concerning the reform are cost, the new public insurance plan which would compete with the private market and whether employers must provide health care for their employees.

“Reform is urgently needed,” Kennedy said, “and Tom Daschle is just the person for the job.”

With the inauguration of president-elect Barack Obama nearing, many are concerned about his new health care policy. Tom Daschle, Secretary of Health and Human Services, backs Obama’s call for a new public health insurance plan to compete with private insurers such as Blue Cross Blue Shield, Aetna, and WellPoint.

Tom Daschle was welcomed with open arms at his confirmation hearing on Thursday. Both parties expressed much admiration to Daschle and are willing to do whatever it takes with him to help our country out of the health care rut it is in.

So what does he want to do when he gets into office? He wants wider insurance coverage, higher quality care, lower costs, more preventive care, more money for community health centers, greater use of information technology, an emphasis on keeping people well, a stronger Food and Drug Administration, and speedier approval of low-cost generic drugs according to the confirmation meeting yesterday.

Other issues he would like to address while in office are reducing the influence of politics at federal science agencies. He would also like to increase Medicare payments to family doctors and other primary care physicians and place more emphasis on the prevention of disease, rather than the treatment of it.

The United States have more of a chance of insuring everyone since Democrats have total control of the government. Because of the recession, the number of uninsured has grown which means that the total cost of insuring everyone will grow as well. Tom Daschle has been a huge part of the U.S. government for over 30 years. He knows what needs to be done and now as Secretary of Health and Human services, it is more likely to get done.

Mercer conducted a survey, the National Survey of Employer-Sponsored Health Plans, which showed that the median deductible required by employers for individual coverage in PPO health plans jumped to $1,000 in 2008. Last year’s median deductible was $500. Since PPOs are the most popular type of health plan coverage with 69% enrollees of all covered employees, it is hard to believe that in just 8 years deductibles have risen from $250 to $1,000. The survey includes private and public employers with 10 or more employees. PPO deductibles remain lower for larger employers, with a median deductible at about $300.

Some findings from the survey include:

§  Employers held health benefit cost increases to about 6 percent in 2008 for a fourth straight year – but that has meant shifting more cost to employees

§  Consumer-directed health plans are offered by 20 percent of large employers, up sharply from 14 percent last year

§  More large employers add incentives to encourage health-conscious behavior
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§  Employers shed retiree medical plans in 2008, but with health reform looming there was no further erosion of active employee plans

 But not only are health insurance deductibles rising, but so are premiums. For coverage that is getting meager, premiums have rose 5% in the last year. Premiums for family coverage have increased to $12,680 and premiums for single coverage have increased to $4,704. Though the 5% increase is fairly low, experts say it is not going to last and it can be considered high when deductibles are increasing as well. Health insurance premiums have shot up 5x faster than workers’ wages since 2000. Since 2000, there has been a 78% rise in premiums from $6,672 in 2000 and $12,680 in 2008.

The rise in health care costs has put a strain on family budgets. These higher health care costs and the decline in the economy have forced families to go without needed prescriptions, preventive care, and tests and doctors’ visits.

Julia Eisman at Families USA‘s Stand Up for Health Care blog writes:

“The economic downturn coupled with ever-rising health care costs has had serious consequences for many of us, but unlike the financial sector, working Americans can’t expect a government bailout. Instead, more individuals are incurring oppressive medical debt (more than half of bankruptcies are now due, at least in part, to problems with medical costs) and many Americans have joined the ranks of the underinsured and uninsured.”

So with Obama’s win, what does that mean for healthcare in the upcoming years?

Experts say that because of the financial crisis we are facing today, health care changes are more likely to be phased in over time. But over time we are likely to see an expansion on existing private and public program with help of federal subsidies and mandates. Obama has also repeadly states that the reforms he will impose will lower a family’s health insurance premiums by about $2,500 a year.

These reforms include:

• Requiring employers, except small businesses, to provide health insurance to their employees or contribute to the cost.
• Requiring that all children have health insurance.
• Expanding Medicaid and the State Children’s Health Insurance Program (SCHIP).
• Creating a National Health Insurance Exchange to pool risk and give people the choice of competing private or public health plans.

Karen Davis, President of the Health Policy and Research Group Commonwealth Fund, states that “We can’t afford to stay on the path we are on with regard to total health spending,” she says. “Employers can’t afford it, the government can’t afford it, and individuals can’t afford it. It is just not sustainable.”