Click here to download this easy-to-understand pamphlet by Mass-Care and Massachusetts Jobs with Justice describing how the law works, its successes, and its short-comings.

Health Safety Net
Under Chapter 58, the Health Safety Net was created as a successor to the Free Care Pool. It was implemented on October 1, 2007. Like the Free Care Pool, the Health Safety Net covers medically needed services to those who are not eligible for health insurance and cannot afford to purchase it under the individual mandate. The Health Safety Net has provided care to many who once relied on the Free Care Pool. However, differences between the plans mean that some consumers of subsidized health care are no longer covered under the new plan, or must contribute more fees to their healthcare, which can make needed services less affordable. The Uncompensated Care Pool’s safety net which aided so many has been put in danger by this new law.

Differences Between the Plans - Consequences of Chapter 58:

• Subsidies for low-income residents in Massachusetts are less generous under Chapter 58 than they were for uncompensated care. Prior to the passage of the bill, individuals up to 200% of the poverty line received free care through the Free Care Pool. Under Commonwealth Care, however, only individuals up to 150% of poverty receive care with no premiums.
• The free care pool had no cost-sharing (co-payments and deductibles), while Commonwealth Care does. These fees make care less affordable for some.
• Some have benefited from the new law, as in parts of the state, there were few Free Care providers. Under Commonwealth Care, it is easier for some to find medical care providers.
• The new law cannot be funded, as suggested, through the Free Care Pool. Funds are simply inadequate to achieve this goal.

Other Resources:
Health Safety Net Information

• “Health Safety Net: An Overview,” MassResources.org, July, 2008.

Free Care Pool

• “Massachusetts Uncompensated Care Pool,” Division of Healthcare Finance and Policy, November, 2005.
• “Groups Ask Romney to Postpone Free Care Pool Changes,” Healthcare for All, August, 2005.
• “What’s Next for the Uncompensated Care Pool?” Nancy Turnbull, May 2007.

General Info from mass.Gov

• “Uncompensated Care Pool,” Office of Health and Human Services, 2008.

In addition, the law has had unexpected consequences for labor relations in the state. A November 2007 survey found that 28% of businesses with uninsured workers plan to hold down wages so that their employees will qualify for subsidies under the law. The reform was supported by some unions, but has been met with stiff opposition by others in Massachusetts. Nationwide, individual mandates have been opposed by many labor groups. John Sweeny, the president of the AFL-CIO, commented that “forcing uninsured workers to purchase health care coverage or face higher taxes and fines is the cornerstone of (Newt) Gingrich’s health care reform proposals. And it is unconscionable that Massachusetts has adopted this misguided individual mandate.” Workers have been saddled with higher fees and the possibility of fines, while the reform’s attempts to involve business in cost-sharing have not been effective.

The Employer Fair Share Contribution is a portion of the law which requires that all employers with more than 10 employees make a “fair and reasonable contribution” towards their workers’ health premiums, or pay a $295 per worker per year fine to the state. While the fine is small compared to the cost of health insurance, the state has defined “fair and reasonable” so that it is easy for employers to evade the fine in practice. Employers covering 25% of their workers or offering to pay 33% of the premium costs for any plan are off the hook. The employer fine was applied to no firms in 2006 and only 500 firms in 2007, raising a paltry $5 million. The expected revenue from the Fair Share program in 2006 alone was $45 million. Firms have avoided the fine by paying a smaller share of premiums for more of their workers, or by spinning off parts of the business to get under the 11 employee mark.

Another provision of the law, the Employer Free-Rider Surcharge, would fine employers whose uninsured workers receive care through public insurance. However, employers who offer a “cafeteria plan,” allowing workers to pay for their own benefits even if employers pay nothing into the plans, are off the hook.

Health care costs and access have been an increasingly troubling problem for both business and labor interests. Between 2000 and 2005, premiums for employer-based insurance rose an average of 9% each year. Nationwide, the percentage of employees covered by their employer plans dropped from 81% in 2001 to 77% in 2005, and the trend continues. If our current ineffective system remains in place, there is no end in sight for rising costs and limited access to care. A single-payer system will reduce costs for employees and for those employers currently providing care to their workers. This coverage would also be portable from job-to-job and during times of unemployment.

Further Resources:

• “Firms Find Way Around State Health Law,” Alice Dembner, December 2007.
• “Mass Has Yet to Collect Fees From Firms for Healthcare,” Alice Dembner, May 2007.
• “Worker’s Health Insurance: Trends, Issues, and Options to Expand Coverage,” Paul Fronstin, Ph.D., March 2006.
• “Changes in Employees’ Health Insurance Coverage, 2001-2005,” Kaiser Family Foundation, October 2006.
• “Chapter 58 of the Acts of 2006: How the Law Affects Employers,” Joint Committee on Healthcare Financing, October 2006.

]]> http://masscare.org/ma-health-reform-law/ma-reform-impact-on-business-and-labor/feed/ http://masscare.org/ma-health-reform-law/the-individual-mandate/ http://masscare.org/ma-health-reform-law/the-individual-mandate/#comments Mon, 11 Aug 2008 17:40:25 +0000 Benjamin Day http://masscare.org/?page_id=301 Chapter 58’s most controversial provision is an individual mandate which requires all uninsured residents to purchase health insurance if an “affordable” plan is available. Those below 150% of poverty get free coverage, those from 150-300% get sliding subsidies, while everyone else (about half of the uninsured) must purchase coverage on their own. The standards for affordability have been criticized by health care advocates.

Governor Mitt Romney publicly supported the individual mandate as a means of eliminating so-called “free riding” in the health care system. Romney claimed that “40% of the uninsured were earning enough to buy insurance but had chosen not to do so” (Wall Street Journal). Patients at 300% of the poverty line and up - those targeted as “free riders” by individual mandate supporters - represent less than 5% of uncompensated care costs in Massachusetts, however.

The Personal Responsibility Movement grew largely out of Newt Gingrich’s attack on welfare receipts, the “Personal Responsibility Act” of his 1994 “Contract with America.” The Personal Responsibility Movement aims to prevent “free riding” by public program recipients, and shift financial burdens onto disadvantaged communities, often through punitive enforcement mechanisms. This idea was revived in the 21st Century in the effort to solve the health care crisis.

An individual mandate is one of the most regressive ways of paying for expanded health coverage, shifting responsibility for health care costs onto individual households. Additionally the penalties for non-compliance are extremely stiff. In its second year residents will be fined roughly $1,000 for being uninsured, similar to the fines for some serious crimes.

Further Resources:

• “New York Times examines Massachusetts Individual Health Mandate,” Kaiser Daily Health Policy Report, November, 2007.

The Massachusetts plan lacks cost controls as well as any new revenue sources that could sustain a significant expansion in access to health care. Initial estimates of the costs and available revenue for the reform were wildly unrealistic. Planning for the law significantly underestimated the number of uninsured in the state. Revenues from the employer fine were estimated at $48 million per year, but fell vastly short, raising no funds the first year, and only $5 million the second year. Almost all funding is coming from the state general budget and federal matching grants: however, subsidies for low-income individuals are coming in hundreds of millions of dollars over budget each year, and the Bush administration is poised to cut federal matching funds.

Failure to control costs not only threatens the sustainability of the reform law, but guarantees continued erosion of employer-sponsored health care for the insured population, and growing strain on state, municipal, business, and household budgets. Even those involved in the creation of the law are beginning to admit the problems with their reform. Massachusetts Senate President Therese Murray admitted that “if we do not constrain healthcare costs, the system we worked so hard to create and implement will collapse.” And John Kingsdale, the executive director of the Commonwealth Connector, announced that “if we have double-digit increases (annually in costs), health reform is not sustainable.”

Massachusetts spends enough to cover all residents with comprehensive health care benefits if we cut out waste in the system and use it for patient care. This will require more fundamental reform.

Further Resources:

• “State Health Plan Underfunded,” Alice Dembner, Boston Globe, March 2008.
• “Healthcare Cost Increases Dominate Mass Budget Debate,” Alice Dembner, Boston Globe, March 2008.”
• Healthcare Myths, Realities,” Alan Sager, Ph.D. and Deborah Socolar, M.P.H., Boston Globe Op-Ed, November 2005.
• “Mass Health Spending Soars to $62.1 billion in 2006,” Alan Sager, Ph.D. and Deborah Socolar, M.P.H., A project of the Health Reform Program of the Boston University School of Public Health, June 2006.
• “Without Cost Control, Universal Coverage Will Fail,” Himmelstein, David, M.D., May 2007

The Massachusetts reform is simply a reincarnation of nearly identical plans that have been tried and failed in numerous other states. However, this fact has been misconstrued by the national media, which has portrayed each attempt as unique and revolutionary. After the reform, Massachusetts was lauded as “the only American state committed to comprehensive medical care.” (CBS, 4/6/06) Minnesota’s reform involved subsidies for the uninsured and a state pool that employers could buy into, and was welcomed as a “plan to solve the health insurance crisis.” (USA Today, 7/1/92) Similarly, Oregon’s health reform in 1989 made headlines such as “Oregon’s Health Law Cure for National Ailment.” (Tulsa World, 10/10/89) Tennessee’s governor claimed his plan would become “a national model” and “the most radical health care plan in America.” (Federal and State Insurance Week) All of these plans, advertised as solutions to the national health care crisis, were eventual failures. Harvard professors David Himmelstein and Steffie Woolhandler note that “each of these reform efforts promised cost savings, but none included real cost controls.”

Tennessee’s massive healthcare reform, TennCare, exemplifies the typical trend of these incremental state reforms. Tennessee planned to cover 300,000 uninsured residents in the first year, expanding to 500,000 in the second, through increased federal funds and expanded Medicaid access for the uninsured. The plan, however, quickly proved unsustainable, with the rate of uninsured in Tennessee dropping from 14.7% to 11.2% the first year, but then rising to 16.4% the following year as funding for new enrollment deteriorated. Studies show that, if left unchecked, TennCare would have consumed 91% of all new revenue growth by 2008, creating an overwhelming fiscal crisis and essentially eliminating the state’s ability to fund other state departments and priorities.

States which implemented “universal” incremental reforms, similar to Chapter 58, between 1987 and 2005 overwhelmingly followed the national trend of increasing percentages of uninsured citizens rather than resulting in decreased rates after the implementation of reforms. Consistently, these incremental reform strategies have faced overwhelming budget constraints due to inadequate cost-control strategies and few effective sources of revenue. These budget crises, coupled with rising health care costs, have prevented incremental reform movements in other states from delivering on promises of “universal” health coverage. Single-payer systems cut the waste out of health care by removing a large portion of the administrative overhead. Without addressing the underlying problem of waste and abuse by the insurance companies, universal health care will not be achievable.

Further Resources:

• “I Am Not a Health Reform,” David Himmelstein and Steffie Woolhandler, New York Times Op-Ed, December, 2007.
• “Struggling to Just Keep TennCare: Terminally Ill Woman Booted Under Changes,” Daniel Connolly, Memphis Commercial Appeal, June 2008.
• “The Impact of Federal and State Funding Levels on Strategic Decisions and How Those Affect Patient Care,” Randy L. Byington, K. Shane Keene, and Douglas Masini, The Internet Journal of Healthcare Administration. 2007.
• “Leading the Way? Maine’s Initial Experience in Expanding Coverage Through Dirigo Health Reforms,” Debra J. Lipson, M.H.S.A., James M. Verdier, J.D., and Lynn Quincy, M.A., December, 2007.

Background:
Chapter 58 was passed when the federal government insisted Massachusetts reduce the number of uninsured residents using the state’s Free Care Pool, or lose almost $400 million in matching federal grants. The law constituted a compromise between a Democratic state legislature, a Republican Governor, the Bush Administration, and powerful political entities in the state. The legislation thus included progressive provisions to expand public subsidies for health care, conservative calls for “individual responsibility,” and an effective moratorium on reform of the existing health care system to satisfy the health care industry in the state. The bill was introduced and passed within 24 hours with little public scrutiny. Early media coverage lauded Massachusetts for the introduction of the bill, deeming it “the only American state committed to comprehensive medical care” (CBS) and calling the bill an unprecedented piece of legislation that could achieve what “no other state has been able to do” (The New York Times).

What is Chapter 58?
Chapter 58 is a health coverage reform bill, based on a model of state reform that attempts to “plug the gaps” in health insurance coverage through new or expanded public programs, without making significant alterations to the health insurance or health care delivery system. Under Chapter 58 a public subsidy plan called “Commonwealth Care” subsidizes health coverage for residents up to 300% of the poverty level. The bill requires most other residents to purchase health insurance on their own or face penalties (an “individual mandate”). The law attempts to impose a small fine on employers not offering health benefits to their workers, and increased payments to many hospitals and health centers. The law, premised on moving the population into privately managed insurance plans, has also had a dramatic impact on the existing health care safety net in Massachusetts (called the “Free Care Pool”), as well as the hospitals and health centers who treat the uninsured.

Further Resources:

• Similar Reforms in Other States
• Health Care Costs and the Sustainability of Reform
• The Individual Mandate: Origins and Impact
• The Impact on Business and Labor
• The Health Care Safety Net and the Free Care Pool
• Mass-Care and JWJ Pamphlet: ‘Massachusetts Health Reform: Solution or Stopgap?’
• Mass-Care’s Slide Show on the Massachusetts Health Reform

Where did this law come from? What has happened to similar laws passed in other states? What will happen? And how will it affect you? Find out the answers to these questions in Mass-Care’s comprehensive powerpoint presentation on Chapter 58, below. If you would like to arrange for a Mass-Care speaker to give the presentation in your community or to a group that you belong to, get in touch with us through the contact page!

Slide Show on New Massachusetts Health Care Law

• SiCKO (2007), Emmy-nominated Michael Moore documentary (available on DVD).
• Sick Around the World (2008), PBS Frontline documentary comparing health care in the United States with four other capitalist countries (viewable online).
• Critical Condition (2008), upcoming PBS documentary by Roger Weisberg on the uninsured in America (preview here).
• The Business of Being Born (2008), documentary by Abby Epstein on the impact of commercial health care on the process of child birth in the U.S (available on DVD).
• Health, Money and Fear (2008), documentary by emergency physician Dr. Paul Hochfeld on health care costs in the U.S. (available on DVD).
• Seacouver 2008, American Medical Students Association film comparing health care in the United States and Canada: Part 1, Part 2, download the whole video.
• The Healthcare Solution: California OneCare (2006), documentary about single payer reform in California (viewable online).

Short Length Videos

• HR676 - The Single Payer Solution: Part 1, Part 2, Part 3, and Part 4.
• Union Presentation: US vs. Canada Healthcare
• Animated What is Single Payer? (”Prom” video): Animated informative video about single-payer with Prom Committee analogy.
• Don’t Be a Chicken: Animated video using a chicken analogy to describe the current state of health care.
• Where is my Health Insurance Card? Videos about single-payer from Physicians for a National Health Program.
• HR676 Video Contest: YouTube video contest supporting the national single payer bill, HR676.
• U.S. Health Care Gets Boost from Charity: 60 Minutes segment on international medical relief organization beginning to serve those in the U.S. without adequate medical care.
• Single-Payer Health Care ‘SiCKO’ Tour Boston: Video of Donna Smith and Adrian Campbell speaking at Boston State House showing of ‘SiCKO,’ sponsored by Mass-Care.
• Anybody Can Get Sick: Personal stories from patients and statistics about health insurance and HR676.

Individual Testimony for Single-Payer

• Al Gore
• California State Senator Sheila Kuehl, California’s Single Payer Bill
• Congressman John Conyers
• Mayor of San Francisco Gavin Newsom
• Congressman Dennis Kucinich
• Ralph Nader

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Sandy Eaton, RN

Labor Notes (click here for original article)

Massachusetts pays the most in the nation for its health care, and yet it’s plagued by an ongoing crisis of access, affordability, and quality. Although our experiment in health care reform already has deep problems, policy wonks influencing the country’s health care debate tout Massachusetts as the model for universal health care nationwide. . . .

Leaving the bloated insurance industry in place perpetuates the pain and cost of the current health care system.

Massachusetts pays the most in the nation for its health care, and yet it’s plagued by an ongoing crisis of access, affordability, and quality. Although our experiment in health care reform already has deep problems, policy wonks influencing the country’s health care debate tout Massachusetts as the model for universal health care nationwide.

If Massachusetts is a model, it’s a model of what not to do.

When the legislature passed “shared responsibility” legislation two years ago, nearly every suit in the state’s health care industry celebrated. The concept grew from an October 2005 assembly convened by the Blue Cross-Blue Shield Foundation of Massachusetts that made a bald assertion: there was no way to achieve universal coverage in Massachusetts without an “individual mandate,” the enforceable legal requirement that everyone have health insurance.

OFF THE TABLE

The problem was that the assembly was not allowed to consider Canadian-style single-payer health care—which would eliminate private insurance companies—as an option. It was off the table.

So a new bureaucracy was established, the Commonwealth Health Insurance Connector Board, with broad powers to set rates, approve cut-rate private policies, and define affordability.

Subsidies are offered on a sliding scale for those earning up to 300 percent of the federal poverty line (about $63,000 for a family of four). Those earning below the line are covered free.

The tangle of private insurance companies, with their expensive bureaucracies and profits, remains in place.

The only new source of revenue for these subsidies is the $295 per employee fee paid anually by employers of 11 or more workers who fail to show that they are making a “fair and reasonable” contribution to their employees’ coverage.

The tangle of private insurance companies, with their expensive bureaucracies and profits, remains in place.

Given these constraints, how does the system measure up?

Access. The ability to get care has expanded for some, with an increase in Medicaid enrollment for some of the poorest. But this comes at the expense of many, particularly undocumented workers and their families, who in the past had depended on the uncompensated care pool, or free-care pool, through community health centers and safety-net hospitals.

The pressure is now on to deny free care to low-income immigrants who would be eligible for subsidized programs if their papers were in order.

Out of a population of six million, a quarter of a million residents remain uninsured. About 60,000 have been granted waivers as unable to afford even the subsidized plans.

Others fall through the cracks of a complex bureaucracy, and an unknown number simply defy the system and refuse to fill out the additional pages of questions about their insurance status with their state income tax form.

Affordability. For many, paying for health care without the threat of bankruptcy or giving up other necessities of life remains impossible. Governments and many employers are staggering, too.

Rising costs for public employees’ and retirees’ health insurance has led to round after round of service cutbacks, affecting every resident who uses public services. Attempts at cost-shifting have provoked strikes by teachers and turnovers in city halls.

Employers successfully pressure the Connector Board to keep copays and deductibles high in the subsidized health plans. This keeps those covered by commercial plans from switching to the public ones.

But ironically, those high deductibles and copays are not counted when calculating who qualifies for taxpayer subsidies.

A diabetic stay-at-home mom on the subsidized plan, for example, pays $110 a month for insurance. But the array of drugs and procedures she requires and the limits on her coverage leave her with copayments of about $165 a month.

Quality. The new system doesn’t seem to have improved patient outcomes. A recent study showed that 45,000 patients are injured and 2,000 patients die in Massachusetts each year from hospital-acquired infections and accidents. That’s six patients dying each day.

And hospital executives fiercely resist steps to improve quality. In July they blocked a bill—again—to establish minimum nurse-to-patient ratios. Such ratios have made California hospitals much safer.

STILL NEED SINGLE PAYER

In July Massachusetts Senator Ted Kennedy announced a bipartisan initiative to achieve “universal health care” quickly, in the first days of a new administration. And then came Health Care for America Now, a new 80-member coalition that includes the AFL-CIO, SEIU, and AFSCME. HCAN champions a system—similar to Massachusetts’s—that would leave the insurance companies at their troughs.

During the Great Depression, FDR was elected with a mandate for change, but the specifics were vague and the direction of the new administration nebulous. Like today, an upsurge of grassroots action was needed to set a progressive agenda.

It took 3,000 locals, for example, ignoring AFL President Bill Green’s aversion to “the dole,” as he called it, to establish unemployment insurance.

This may well prove to be just as fluid a moment in history. Nothing of consequence—like universal, single-payer health insurance—will succeed without solid grassroots organizing that sets the agenda for the next administration.

Sandy Eaton is Region 5 president of the Massachusetts Nurses Association and vice chair of the Massachusetts Campaign for Single Payer Health Care.