Polls show that Americans are confused about what health care reform means. And, if you listen to members of Congress on television, you get the impression that some of them aren’t certain, either. But figuring out what health care reform entails isn’t hard. All you have to do is look at Massachusetts.
Almost three years ago, the state introduced an ambitious initiative designed to make sure nearly all residents have health insurance. Under this scheme, the state requires employers to contribute toward the cost of covering workers, while requiring individuals to get insurance. It sets up regulated marketplaces, through which individuals and small businesses can obtain insurance, and it forbids insurers from denying coverage, or charging higher rates, because of preexisting conditions.
These are the same key elements you’ll find in the reform bills moving through Congress--which is precisely what has a lot of people worried, on both ends of the ideological spectrum. Conservatives tend to see Massachusetts as a classic case of government run amok. Liberals, although more sympathetic to the basic idea, say the reforms have provided too little coverage for too much money. There’s even one argument on which critics from both sides agree: Massachusetts hasn’t figured out a way to restrain the overall growth in health care costs. If national health care reform fares no better, the country could be in serious fiscal trouble.
The critics have some valid points, particularly on the question of costs. And, with key details about national health care reform still unresolved, understanding the shortcomings in Massachusetts could help lawmakers make the right choices. But the more significant story about Massachusetts is the one that gets told too rarely: the story of what’s gone right. If Massachusetts offers a preview of where we are headed nationally, then Americans can look forward to a health care system that, however imperfect, will be vastly better than the one we have now.
Health care reform in Massachusetts was actually the product of a long struggle that dates to the 1980s, when the state passed a law requiring employers to offer coverage to their employees or contribute toward the cost of covering uninsured workers. It was an ill-fated, if noble, effort: Before the law took effect, employers won repeal of its central provisions. Chastened, lawmakers in the ensuing years focused on incremental reforms, such as expansions of public programs for children and the restructuring of a fund to help subsidize charity care. The initiatives helped, but plenty of residents still struggled to find affordable medical care--either because their insurance was inadequate or because they were among the 10 percent of residents who had no coverage at all.
In 2006, though, reform advocates finally got a chance to try something big again. It was all thanks to a fortuitous political circumstance--one that spawned an unlikely alliance between Republican Governor Mitt Romney and Democratic leaders in the legislature. The Bush administration had decreed that it would not renew a special “Medicaid waiver,” under which Massachusetts channeled some federal money to large safety-net hospitals, unless the state redirected the money toward expansion of insurance coverage. Compelled to act, Romney and the legislature agreed on a scheme that blended ideological approaches and demanded compromise from both sides. There would be insurance for everybody, but everybody would have to pay what they could for it. Liberals wouldn’t get a single-payer plan or anything close to it; conservatives would have to put up with a large expansion of government, even by Massachusetts standards. Fittingly, Senator Ted Kennedy--who’d helped orchestrate the deal from Washington--appeared alongside Romney at the signing ceremony in Boston’s historic Faneuil Hall.
Three years later, that system remains in place, and Massachusetts residents deal with health insurance in virtually the same way that all Americans would if Congress were to pass health care reform. By law, anybody living in Massachusetts must obtain health insurance or face a penalty, which this year will be as much as $1,068. For the majority of people, who work for large companies, that means buying the coverage their employers make available. For those who don’t have insurance through a large employer, that means using the “Connector,” a regulated market administered by state-appointed officials.
The goal of the Connector is to give everybody the same sorts of choices people working for large employers already have. It screens insurance plans to make sure they meet basic standards, like covering all essential care and limiting out-of-pocket expenses to $10,000 per family. Because buying insurance can be expensive--Massachusetts has the nation’s highest premiums, at more than $13,000 a year for the average family policy--the Connector also makes subsidies available. Money for the subsidies comes from a variety of sources, including (token) contributions from medium and large employers who choose to pay a fee rather than provide health benefits for employees.
There’s no disputing that the reforms have expanded coverage. During a period in which the proportion of Americans without health insurance has remained stuck at more than 15 percent, the proportion of Massachusetts residents without coverage has fallen dramatically, to below 3 percent, according to official figures. That is by far the lowest percentage of any state.
Of course, coverage by itself is meaningless if it doesn’t translate into more access to medical care or less financial hardship because of medical bills. And there is evidence, mostly anecdotal, that some people are really struggling under the new scheme, either because it’s tough to pay the insurance premiums or because, even with coverage, their medical bills are a burden. But the overall picture looks encouraging. According to a study that two Urban Institute researchers published this spring, the number of working-age adults reporting that they skipped care because of high costs fell from 17 percent to 11 percent in the first two years after the law took effect. The gap was even more dramatic among those eligible for subsidized insurance through the Connector--that is, people making less than three times the poverty line, or around $66,000 per year for a family of four. Among those people, the proportion skipping care because of cost fell from 27 percent to 17 percent. And that’s despite a rough leveling-off in the second year, most likely due to the fact that the recession meant lots of people were out of work and counting their pennies. When the economy rebounds, the number should decline even more.
Still, there is the problem of overall cost. The new rules for the individual insurance market have brought down premiums for people buying coverage on their own, which is no small feat. But the Massachusetts reforms haven’t brought down prices on the whole. In fact, premiums for people who get insurance through employers are rising a tad faster than they are in the country at large. If costs continue to skyrocket, the state’s health care reforms will become unsustainable, requiring either large cuts or tax increases.
Then again, until recently, Massachusetts hadn’t seriously tried to reduce costs. The goal was simply to expand coverage and, perhaps, deal with costs later--which seems to be what’s happening now. In July, a special task force recommended far-reaching changes in the way insurance pays for medical care, by, for example, paying physicians an annual fee per patient rather than a fee for every additional service. For years, experts have said such reforms could save money. But these arguments are only now getting political traction, and many in Massachusetts credit the reforms. As this argument goes, the new system, by giving the state a greater stake in health care costs, has focused public attention on the problem and provided the government with more leverage to solve it. The left also seems more invested in the cost issue now, if only because it recognizes that controlling costs is necessary to sustain the recent coverage expansions.
That doesn’t mean Massachusetts will succeed. Many experts, in fact, think only the federal government has the power to make serious changes in the way medical care is financed and, as a result, practiced. But there are signs that such changes may be coming. President Obama and his allies have focused on costs in ways that the Massachusetts reformers never did. Many experts believe that the most aggressive measure on the table, the Senate Finance Committee bill, would, over time, reduce the annual increases in health care spending.
Of course, every cost-cutting measure offends at least one powerful interest. Already, groups representing doctors, hospitals, device-makers, and the drug industry have been striking deals with the White House or congressional committees--deals designed to shield their members from changes that hold out promise for long-term spending reductions. But, if Massachusetts proves anything, it is that you don’t have to get everything right on the first try. Simply by addressing the coverage problem, you create political conditions for addressing the cost problem. And, in the meantime, you’ve put access to affordable health care within reach of nearly the entire population. It wouldn’t be everything reform could be. But it would be a historic accomplishment all the same.
Jonathan Cohn is a senior editor of The New Republic.