Achieving Meaningful Health Care Reform: Lessons from Massachusetts

1. Achieving Meaningful Health Care Reform:Lessons from Massachusetts Michael Doonan, Ph.D. Massachusetts Health Policy Forum Heller School for Social Policy and ManagementBrandeis University June 12, 2007 Blue Cross Blue Shield of Massachusetts Foundation

2. Overview • Forces driving reform: The Vision • Individual mandate • Medicaid Expansion/Outreach • Commonwealth Connector Authority • Commonwealth Care • Commonwealth Choice • Lessons

3. Forces Driving Reform • Federal waiver at risk ($385 million per year) • Road map to coverage • Substance • Venues • Grassroots coalition (ballot initiatives) • Leadership (Governor, Speaker, Senate President)

4. Roadmap to Coverage • Senate President Travaglini • Urban Institute Report • What does it cost to pay for the uninsured, who pays, and how much more money do we need?Nov. 16, 2004 • Governor Mitt Romney • Urban Institute Report • Policy options,June 2005 • Speaker Sal DeMasi • Urban Institute Report • Implementation issuesOct. 2005

5. Massachusetts Advantages • History of reform • Relatively low number of uninsured (8 to 11 percent vs. 16% in U.S.) • Uncompensated care pool ($1 billion and growing) • Strong public coverage and safety net • Budget surplus (at the time)

6. Massachusetts Vision • Shared responsibility • Individual • Government • Employer • Build upon the existing base • Shift from safety net to insurance • Keep stakeholders connected

7. Individual Mandate • The political left and right have mixed feelings • In Massachusetts legislation • Only if affordable (to be defined) • July 2007 loss of personal exemption if no coverage • Tax year 2008 half the monthly cost of acceptable low-cost insurance

8. Government Action • MassHealth (Medicaid) expansions • Commonwealth Care • Commonwealth Choice • Health Care Connector • Additional insurance reforms • Establish “quality and cost” Commission

9. MassHealth (Medicaid) • SCHIP: Eligibility increased from 200 to 300% FPL • MassHealth Essential (long term unemployed) • CommonHealth (people w/disabilities HIV) • Restoration of cut benefits • Outreach ($2.7 million)

10. Outreach • 20% of uninsured eligible for MassHealth, now closer to 10% • Funding two types • Model A: community and neighborhood groups • Model B: coordinating entities • Health Care For All • Massachusetts Hospitals Association • Virtual Gateway • Real Benefits Program

11. Commonwealth Care Connector • Organize Market (buyers and sellers) • Choice • Portability • Multiple Source Payments • Pre-Tax • Lower Costs through limited network plans

12. Commonwealth Care • Private premium assistance program for uninsured at or below 300% of FPL • No premium up to 150% FPL • 150 to 300 FPL sliding scale premium/no coinsurance (27K individual 60K family)

13. Commonwealth Care Benefits • Inpatient services in hospitals • Preventive and primary care (Check-ups and physicals) • Medical care from a specialist in a doctor’s office, community health center or hospital • Emergency care • Vision care • Prescription drugs • Inpatient and outpatient mental health and substance abuse services

14. Commonwealth Care Premium Subsidies 100% FPL Family of 1 is $9,804 300% FPL Family of 1 is $29,412 Family of 2 is $13,200 Family of 2 is $39,600

15. Commonwealth Care Co-payments

16. Estimate of Newly Covered Uninsured as of June 1, 2007

17. Insurance Reforms • Combine individual/group markets • Decrease rates 15% in the non-group market • Increase rates 1.5% in the small group market • Low cost, reduced benefit plan for ages 19 to 26 • Young adults can be covered under parents' plan until age 25 • Section 125, Cafeteria Plans (Required for businesses over 10 employees to enable pre-tax payments) • Moratorium on new mandated health benefits until 1/1/2008

18. Commonwealth Choice • For small business with fewer than 51 employees • For uninsured individuals over 300% FPL • Private plans certified by connector • Pre-tax if through the connector • Range of private insurance options • Trade-off between affordability and level of benefits

19. Commonwealth ChoiceSeal of Approval

20. Commonwealth Choice Connector Policy Committee Recommendations

21. Commonwealth Choice Plan Costs

22. Potential Roadblock • Minimum Creditable Coverage • What is insurance • What meets the requirements of the mandate • Affordability • The Mandate applies only if “affordable” • What is affordable for whom?

23. Minimum Creditable Coverage • Minimum standard that will be required to meet the mandate (250,000 don’t currently meet) • 18 month extension to meet (January 1, 2009) • Include Drug Coverage • Covers preventive physician visits prior to any deductible • Annual out-of-pocket cap 5K, 10K family • Deductibles cannot exceed $2,000 individual and $4,000 family • No limits on per year or per sickness • Can have a lifetime cap (360,000 covered lives in Massachusetts do)

24. Affordability • Mandate applies to 99 percent of adults • Commonwealth Care Subsidies are considered affordable • No premium up to 150% poverty level • Reduction in premium individuals and families under 200% FPL • Sliding Scale levels of affordability over 300%FPL • Responsible for full premium • $50,000 for individual • $80,000 for couple • $110,000 for family

25. Affordability for an Individual

26. Affordability for a Couple

27. Affordability for a Family

28. Ownership! Who owns Massachusetts Health Care Reform?

29. MASSACHUSETTS LEAGUE OF COMMUNITY HEALTH CENTERSGood health.  Right around the corner.

30. Lessons • Ownership • Massachusetts • TennCare • Clinton Plan • SCHIP • Big events call for BIG plans • Politics is more important than the particulars • Clinton Plan • SCHIP • “Socialized Medicine” is the kiss of death • Small business can kill the plan on talk radio

31. Lessons, continued… • Nothing like a hanging to focus a person’s mind • The potential loss of federal $ pushed the process forward • Bipartisanship is essential with strong majorities • This means interest groups must be in the game • This means build upon the existing infrastructure • No substitute for leadership • Sustained progress requires mandates • Don’t let the best become the enemy of the pretty good • The devil is in the details

32. Challenges for the Second Year • Outreach and public awareness • Affordability • Mandate • Rising Health Care Costs • Maintaining Broad Interest Group Support • Temptation to Tamper • High Expectations • Coverage of Immigrants

34. AchievingMeaningful Health Care Reform:Lessons from Massachusetts Michael Doonan, Ph.D. Massachusetts Health Policy Forum Heller School for Social Policy and ManagementBrandeis University June 12, 2007 Blue Cross Blue Shield Foundation of Massachusetts