Health Care Reform: Massachusetts One Year Later

1. Health Care Reform:Massachusetts One Year Later Sarah Iselin Massachusetts Division of Health Care Finance and Policy October 26, 2007

2. The Massachusetts Law:Why So Much Attention? • Ambitious goal: Near universal coverage • Transcends ideology • Bipartisan support • Combines policy solutions from the right and the left • Partnership between federal government and state • Novel approaches • Individual mandate, employer responsibility, insurance market changes

3. Massachusetts:The Building Blocks for Reform • Relatively low rate of uninsurance • History of health coverage expansions • Broad Medicaid program • 1115 Waiver • Uncompensated Care Pool • Highly regulated small group and individual health insurance markets

4. How Will We Get There? • Medicaid expansions and restorations • Subsidized coverage for low-income adults • Changes to the insurance market to help individuals and small businesses • Individual mandate • Employer responsibilities (for firms with > 11 employees)

5. Massachusetts Health Reform:How Do the Pieces Fit Together? Percent of State’s Total Uninsured Targeted by Different Aspects of Law

6. MassHealth Caseload 1,150,000 Commonwealth Care Health Care • Discontinued 1,100,000 Reform MassHealth Basic • Premiums for some Initial Gateway roll- optional populations out 1,050,000 1,000,000 950,000 900,000 MassHealth Essential 850,000 800,000 Jul-02 Jul-05 Jul-03 Jul-04 Jul-06 Jul-07 Jan-03 Oct-02 Oct-03 Oct-04 Jan-05 Oct-05 Jan-06 Oct-06 Jan-07 Apr-04 Jan-04 Apr-07 Apr-03 Apr-05 Apr-06 Medicaid: +56,000 Members August 2007 1,090,000 1,034,000

7. Commonwealth Care: 127,000+

8. Commonwealth Choice: 6 Plans, 36+ Products, 8,300+ Members

9. Meanwhile, Uncompensated Care Demand is Falling * Growth rate reflects October-August data in both periods

10. Individual Mandate: The Benefits (Minimum Creditable Coverage) Benefits • Preventive and primary care (at least 3 visits prior to deductible) • Emergency services, hospitalization benefits, ambulatory patient services, mental health services and all state mandated benefits • Prescription drug coverage Cost-sharing • Deductible capped at $2,000 for individual coverage and $4,000 for family coverage • Separate drug deductible may not exceed $250 for individual and $500 for family coverage • Maximum out-of-pocket spending for in-network services capped at $5,000/$10,000 • Must include the upfront deductible, most co-insurance, and any services that require $100 or more in co-payments

11. Individual Mandate: The Affordability Schedule

12. Individual Mandate: The Tax Form

13. Employer Responsibilities • Fair Share Contribution • Make “fair and reasonable” contribution to health insurance or pay assessment (no more than $295 per employee per year) • Employee take-up rate of 25% or more, or • Offer to pay 33% toward cost of coverage • Offer Section 125 Plans or could be subject to Free Rider Surcharge • Allow employees to make pre-tax contributions to health insurance or pay “fair share” charge • Applies only to employers with ≥ 11 full-time employees

14. Challenges Ahead • Education, outreach and enrollment • Sustaining public support • Ensuring access for the newly insured • Financing – strong state economy • Continued federal support for waiver renewal • Maintaining strong safety net for those who will remain uninsured • Moderating health care cost trends