Massachusetts Health Care Reform

1. Massachusetts Health Care Reform November 2006

2. Agenda • Overview of Massachusetts Healthcare Reform • Implementation Update

3. Massachusetts healthcare problem: • Growing number of uninsured – 460,000 in 2004 • Expensive emergency room care • Poor preventative, primary care • Double-digit insurance premium rate hikes • Businesses dropping benefits nationally • Hard for individuals and small businesses to buy insurance • Free-riders • $1.3 billion cost of free care- growing bigger every year

4. The Uninsured in Massachusetts • Total Commonwealth Population: 6,400,000 • Currently insured (93%) • Employer, individual, Medicare or Medicaid 5,940,000 • Currently uninsured (7%) 460,000* 106,000 • <100% FPL Medicaid eligible but unenrolled • ~100-300% FPL 150,000 Low Income • >300 FPL 204,000 Middle Income Note: Based on August 2004 Division of Health Care Finance and Policy statewide survey * August 2006 Division of Health Care Finance and Policy stateside survey shows 372,000 uninsured residents

5. Organizing principles for a “fully insured” population • Stabilize the small group insurance market and keep small businesses from dropping insurance • Introduce lower-priced, comprehensive health insurance products • Bring younger, healthier people into the risk pool • Create a Connector to permit pre-tax premium payments • Facilitate the purchase of insurance by part-time employees and employees with multiple employers • Promote a culture of insurance and personal responsibility • Control costs for system sustainability

6. Responsibility for key elements of the law • Small Medicaid expansion • Subsidized insurance • The Connector • UC pool reform • Insurance Reforms Health Care System Government • Meet quality and performance standards • New levels of “transparency” • Serve more patients • P4P Expanded Coverage Employers Individuals • Mandatory “cafeteria plans” • Anti-discrimination • Fair Share Assessment • “Free Rider” Surcharge • Individual Responsibility

7. Benefits of the law • Constrain costs • Retain federal funding • Better care for residents • UC pool reform • More transparency • Better functioning market Health Care System Government • Fair reimbursement • Less cost-shifting • Better care • Care in appropriate settings Expanded Coverage Employers Individuals • Level playing field • More affordable options • More choice • Options for part-time workers • Less cost-shifting • More affordable options • Employed can buy pre-tax • More choice • Better options for part-time workers • More transparency

8. Agenda • Overview of Massachusetts Healthcare Reform • Implementation Update

9. Progress to date • Connector up and running • Commonwealth care benefit packages and subsidies determined • Commonwealth Care enrollment began Oct 1, 2006 • Medicaid expansions implemented • Fair Share regulation completed • Free Rider regulation completed • Education of employers has begun

10. What’s left to do? • Determination of what constitutes creditable coverage • Specifications for affordable insurance benefit packages • Determination of how affordability for people over 300% FPL will be handled • Determine eligibility and services for Safety Net Care • Merger of nongroup and small group markets • Reporting requirements for employers (HIRD) • Rules for Section 125 Plans • Anti-discrimination rules and guidance • Education, marketing and enrollment

11. Good news so far but …… • Recent Survey of MA residents found: • 80% had heard of the law (about a quarter of them knew a lot) • 64% support the law • More support for Medicaid expansion for kids and business requirement to offer or pay penalty than for individual mandate • Support across subgroups of insured and uninsured and socio-economic status • Some skepticism expressed about implementation • Concerns about small businesses • Continued support will depend on affordability of premiums Results from Survey of MA residents conducted by Robert Blendon for BCBS Foundation