HEALTH REFORM “ANNUAL REPORT” & NEW AFFORDABILITY STANDARDS

Statement from Jon Kingsdale, Executive Director, The Connector:

Massachusetts just celebrated the two-year anniversary of enacting landmark healthcare reform. Under the law, the government helps those who cannot afford insurance, employers are required to do more to cover their employees, individuals are required to purchase insurance, if affordable, and we have reformed the commercial insurance market. Implementation began on July 1, 2006, and 18 months later, (January 1, 2008) Massachusetts had enrolled some 340,000 newly insured, more than 5 percent of the state's population and more than half of its uninsured.

One-third of the newly enrolled (110,000) are in private, commercial insurance—through the growth of both employer-sponsored (85,000) and individually purchased, “non-group,” insurance (25,000). Non-group insurance grew by nearly 50 percent in just the last six months of 2007, and 70 percent of that growth came through the Commonwealth Connector. In a state without much population growth, this marks the first significant expansion of private coverage in decades and strong evidence that expanding coverage does not have to mean that people are simply shifted from the private to the public sector.
Last July, the Health Connector began to offer the state’s typical uninsured adult – a 37-year old Bostonian -- private health insurance with twice the benefits, at half the price, as previously available to that same individual. When these policies renew in July of 2008, they will cost only 5 percent more than a year before, compared to the double-digit inflation that many had thought was an unavoidable trend.

Enrollment in the subsidized Commonwealth Care program continues to grow. Nearly 175,000 Massachusetts residents have obtained coverage through that program as of April 1st. Importantly, more and more of these members, almost 50,000 currently, are responsible for paying a monthly premium toward one of the four private Commonwealth Care plans that we offer.

Our success in enrolling the uninsured accelerates the need to contain costs. With health care accounting for 16 percent of the national economy - larger than manufacturing (12 percent), twice the size of education (8 percent), and dwarfing agriculture (1 percent) - costs are key, of course. Addressing the relentlessly increasing cost of medicine requires fundamental change in the way we deliver and pay for it. We must move reimbursement away from a model that simply pays for more and more tests and procedures. Rather, we need a model that rewards doctors and hospitals for finding innovative ways of doing the most good for truly sick people, within a modestly growing budget.

Massachusetts is already considering some of these reforms. The state's new "Healthy Mass" compact aims to improve the delivery of chronic care and reward better performance. Blue Cross & Blue Shield of Massachusetts, the state’s largest carrier, has developed an innovative contract to reimburse healthcare systems for providing quality care to an entire population, rather than simply pay them more for each service. Senate President Therese Murray and her leadership team have crafted legislation to increase access to primary care providers, reduce hospital acquired infections, automate medical records, and streamline communications among patient, physicians and other providers. The Board of Directors of the Health Connector just completed lengthy deliberations with another series of unanimous votes for increasing cost-sharing with Commonwealth Care enrollees and updating our “affordability” standards. (See the new 2008 Affordability Schedule below.)

Nationally, the greatest obstacle to expanding coverage has been the sense that it is politically impossible. Recent history in Massachusetts is proving otherwise. The extraordinary coalition of employers, insurers, medical providers and advocates that came together to promote coverage two years ago remains strong, and now faces the enormous challenge of making it affordable. The state's political leadership is firm in its commitment, including Speaker Salvatore DiMasi, who championed this reform, and Governor Deval Patrick, who has strongly embraced it.

Having committed to near-universal coverage as a moral imperative, we have started down the road toward fundamental reform of our health care system. We began with coverage and now we confront costs.

- Executive Director’s Message, Jon Kingsdale, Executive Director, The Connector, April 17, 2008.

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