The Massachusetts experiment in health care reform is all about expanding access. But it doesn’t try to control costs. This, in a nutshell, is why it’s running into trouble.
The plan didn’t reform health care delivery, just coverage. Granted, in terms of bringing more people in under the tent, it’s been a success: Since the plan went into effect in 2006, 439,000 people have signed up for insurance—a number that represents more than two-thirds of the estimated 600,000 people uninsured in the state two years ago. This surge in coverage has reduced use of emergency rooms for routine care by 37 percent, which has saved the state about $68 million. (Going to the ER for routine care drives up health care costs by creating longer wait times and tying up resources that can be used to help patients who are critically ill).
But even with these savings, Massachusetts is having trouble funding its plan. Earlier this month the Boston Globe reported that the governor’s office is planning to shift more responsibility for funding to employers. Currently, the Mass. Health care law requires most employers with more than 10 full-time employees to offer health coverage or to pay an annual ‘fair share’ penalty of $295 per worker: this is called ‘pay or play’, an employer either provides coverage or pays a fee toward the system for not doing so).
To “play” rather than “pay,” employers must show either that they are paying at least 33 percent of their full-time workers’ premiums within the first 90 days of employment, Or that they are making sure that at least 25 percent of their full-time workers are covered on the company’s plan. (In other words, they must be paying a large enough share of the premiums so that 25 percent of their employees can afford the plan they offer.)