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Massachusetts healthcare reform-- changes that need to be made!
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In 2006, the Commonwealth of Massachusetts passed their landmark health care reform act effective January 1st, 2007. The main component requires Massachusetts residents to obtain health insurance. If a tax-payer does not have proof of health insurance coverage, they will be assessed a penalty. Initially the penalty was $219, but has steadily increased and now can be as high as $912.
The premise that the insured people are subsidizing the cost of the uninsured. If we could somehow get everyone to have health insurance then we would be able to reign in costs. Instead of someone waiting until a condition spirals out control and cost hundreds of thousands, a person would get treatment earlier through the primary care doctor. Makes sense, but has it worked?
Every day I see the premium renewals for my clients and it has not worked. My clients are still seeing the same double digit increases. Here is what needs to be done to make this work.
First, currently we have a 12 month "open enrollment"". A person, who has no health insurance today, can go out tomorrow and get coverage without any pre-existing condition exclusions, have everything covered and then cancel coverage the day after that. Like Medicare or any private or public employer, we need to limit the "open enrollment" to one month per year. Recently Harvard/Pilgrim looked at a 12 month period and found that 40% individuals who had signed up during that time period only kept the coverage 5 months or less. More importantly they incurred on average of approximately $2,400 per person in monthly medical expenses, roughly 600% higher than what we would have expected.
Second, the penalty is not enough. Although $912 is alot of money, but when the medium family premium is $1,000 per month a penalty of $912 is insignificant. Some people have decided to merely pay the penalty and if they need the health insurance, they can go out and buy it tomorrow because of our year-round open enrollment. A penalty in the 2,500 to 3,000 range should be implemented.
Third, we need to allow people to buy coverage that does not require them to have prescription coverage or state mandates. The Commonwealth of Massachusetts has instituted what is referred to as Minimum Credible Coverage (MCC) to avoid paying the penalty . Currently MCC requires prescription coverage. This needs to be changed and people should have their choice if they want prescription coverage or not, just like we do with Medicare. In addition The Commonwealth of Massachusetts has many costly states mandates like invitrofertilization, which was determined to represent 6% of the premium by the by the state Division of Health Care Finance and Policy. Many large employers are able to avoid these mandates through their self-insured plans, we should give smaller employers the same ability.
Fourth, the Insurance Partnership, an agency that helps employees under certain income limits pay for their group insurance no matter what plan they have needs to be expanded. The great thing about the Insurance Partnership is that it is not an insurance plan!! This agency allows the underlying private insurance plans compete against each other at the employer level, but steps in to help the employees, who are income eligible, to buy or keep coverage.
Lastly, CommonwealthCare, a subsidized plan to help individuals earning up to 300% of the Federal poverty limit needs to institute an asset test. Currently a family earning under $65,000 can qualify for CommonwealthCare even if they have millions in assets? Medicaid requires an asset test for nursing home coverage, shouldn't CommonwealthCare institute a similar asset test?.
I believe if these changes the intent of the Massachusetts health reform efforts will be realized.
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