In April of this year, Massachusetts became the first state in the nation to require that all of its citizens have some form of health insurance. Hailed as a model for national healthcare reform, this legislation promises that citizens of Massachusetts who are already insured will see a modest drop in premiums; low-income residents will be offered new plans, more affordable plans and subsidies to help them pay for coverage; and those who can afford insurance but refuse to buy it on their own will face penalties until they obtain coverage.
This bill was no small accomplishment; it passed the Massachusetts House by 154-2 votes and the Massachusetts Senate by 37-0 and was signed into law. The incentive to act quickly was a federal carrot of $385 million that would have been withheld if it did not show significant progress in reducing the number of uninsured in Massachusetts by July 1. [Massachusetts is under a Section 1115 waiver, allowing it to conduct certain experimental, pilot or demonstration projects to assist in promoting the objectives of Medicaid, and therefore entitling it to special Medicaid grants.] Massachusetts estimated that about 500,000 residents or about 7 percent of their 6,349,097 citizens are uninsured.
What is especially important about the Massachusetts reform is the individual mandate which requires every person to purchase coverage or pay increasing tax penalties. Under this individual mandate those who are deemed able but unwilling to purchase coverage could face fines of more than $1,000 per year.
An important entity is created under the bill, the Commonwealth Health Insurance Connector, to be overseen by a board of private and public members. Health insurers will propose their low-cost plans to the Connector, which will decide if they meet quality and affordability standards. The individual mandate to buy health insurance only applies if the Connector determines the proposed plans are affordable. Over the next year, this group will define what levels of premiums are affordable for the uninsured.
Plans that are approved will be offered to all individuals or businesses purchasing coverage through the Connector. State law discourages large deductibles and caps on services. Anyone with income below about $9,800 per year will receive free health care with no deductibles or premiums. Those individuals who make more than $9,800 and less than $28,000 per year will gain access to plans with no deductibles and sliding-scale premiums. A family of three with income less that $48,000 will also get coverage on a sliding scale premium with no deductibles.
When Governor Mitt Romney proposed a universal health insurance plan a year ago, a key element was providing low-cost, basic coverage for about $200 a month; but lawmakers and insurance executives have speculated that the average premiums will be about $325 a month for individuals and as much as twice that for families.
Compared to Massachusetts, North Carolina faces a much bigger problem. Out of over 8 million citizens, nearly 17 percent or 1.4 million residents do not have healthcare coverage. Imposing an individual mandate on residents to purchase or buy into a state-sponsored health plan is not so easy. How will North Carolina respond to the increasing demands for healthcare reform?
You can be confident that every state in the nation will be watching to see how Massachusetts formulates and implements their new healthcare plan. If they show significant progress in covering the uninsured, you can expect that other states will follow suit with their own package of reforms similarly constructed.
States are acting because the federal government is not, policy experts say. Massachusetts is but one example of a handful of states dramatically engaged in the battle to reform health care. It is only the beginning, but we should be paying close attention!