The price of reform

Our new health care system has not been a Massachusetts miracle

one of the hallmarks of a successful and compassionate society is its ability to provide care for its citizens. I believe that every individual and family in the Commonwealth should have access to quality, affordable health care. However, it’s equally important to take affirmative steps to ensure the stability of the Massachusetts economy, and not place unnecessary fiscal burdens on our taxpayers. As we review the performance of our state’s health care system since the passage of reform in 2006, it is imperative that we balance these objectives.

Health care reform has not been a Massachusetts miracle. The state’s new health care system has been fraught with problems from the start, from excessive costs to taxpayers to unaffordable insurance options for families. An analysis shows that the Commonwealth’s program has not been able to fully provide efficient, affordable health care in a fiscally responsible manner.

Health care reform was supposed to make it easier for individuals, families, and employees to obtain insurance coverage. However, simply having access to insurance does not guarantee health care, nor does it lead to a positive balance sheet for the program. The reform has placed an enormous hardship on middle-class residents who do not qualify for the state-subsidized Commonwealth Care program, as high premiums, deductibles, and bill payments — even for the least expensive plans — have rendered these options unaffordable.

Here’s just one example. A report prepared by Drs. Rachel Nardin, David Himmelstein, and Steffie Woolhandler of Harvard Medical School states that the least expensive plan available to a middle-income, 56-year-old individual costs $4,872 in annual premiums. That does not include a $2,000 deductible if the person actually gets sick, or the 20 percent of the person’s medical costs — up to $3,000 a year — he or she is required to pay, meaning that an individual’s total annual bill for health care could reach $9,872.

there is a fundamental difference between access to insurance and actually obtaining treatment. High deductibles and other payments have, in many cases, decreased access to care for those who do have insurance but are unable to meet the financial demands their policies impose. Additionally, the Commonwealth’s new insurance policies require co-payments for services such as prescriptions and office visits, which makes health care that previously would have been available through “free care” too expensive for some. (This may place less of a financial burden on the state, but it exposes a significant problem with the reform: a decrease in actual health care received by individuals.)

The state’s health care program also fails to reach everyone in Massachusetts. While many advocates of the reform have lauded the program’s success, claims that the state has achieved near universal health care fall short. Urban League studies from 2008 and 2009 claim the percentage of insured residents has risen to over 97 percent, but these surveys generally did not reach non-English speaking residents and individuals without land phone lines — demographics less likely to have coverage. Additionally, these studies were based on data reported prior to last year’s economic downturn, which probably led to a reduction in the number of privately insured residents.

Discrepancies continue. The state Department of Health Care Policy and Finance has reported that the number of patients receiving free care has fallen by approximately 35 percent. However, the Harvard Medical School report referenced earlier estimates that the number of patients would have had to decline by at least 75 percent for Massachusetts to have achieved the 2.6 percent uninsured residents reported by the Urban Institute in 2008 and 2009, leading to the conclusion that there are more uninsured than those studies show. For example, the 2008 US Census Bureau survey indicated that 5.4 percent of state residents remained uninsured — a number that’s likely higher now, given the dramatic increase in statewide unemployment.

From an economic standpoint, health care reform has proven to be an unsustainable financial burden that poses a long-term risk to the state’s fiscal health. According to the state information statement submitted to bondholders in August 2008, the cost of the Commonwealth Care program has more than doubled since its inception, increasing from $630 million in 2007 to $1.1 billion in FY08 and over $1.3 billion in FY09. This trend is projected to continue, as state estimates reported by the Boston Globe indicate that the Commonwealth’s subsidized insurance plan will top $1.35 billion in annual expenses by the beginning of FY12. With significant unemployment and budget revenues increasingly scarce, our health care system is currently on the brink of representing another significant unfunded liability.

Meet the Author
Rather than providing a solution, the Massachusetts health care laws have only created more problems, both on the state’s balance sheet and in struggling households across the state. Our residents deserve accessible, affordable health care that will not jeopardize the Commonwealth’s fiscal health, goals we cannot attain under the current system.

Timothy P. Cahill is the state treasurer and an independent candidate for governor.