Massachusetts Health Care Reform: The View from One Year Out

By Gruber, Jonathan | Risk Management and Insurance Review, Spring 2008 | Go to article overview

Massachusetts Health Care Reform: The View from One Year Out


Gruber, Jonathan, Risk Management and Insurance Review


ABSTRACT

One of the most important developments in health policy in recent years was the health reform plan enacted by Massachusetts in April 2006. This sweeping bill reformed insurance markets, subsidized insurance coverage for a large swath of the population, introduced a new purchasing mechanism (the "Connector"), and mandated insurance coverage for almost all citizens. In this article, I review the history of health reform in Massachusetts, highlighting the unique features that came together to make reform a reality in this state. I then turn to a discussion of the major issues that have been faced in the first year of implementing this reform and the compromises made to maintain a broad consensus of support in the state. I also discuss the lessons learned and contrast the Massachusetts approach with alternatives, most notably plans that rely more strongly on the employer-based insurance system to expand insurance coverage in the United States.

There is a standard health policy joke that goes like this: Health policy expert X dies and goes to heaven. When there, he is greeted by God himself, and the Lord says that the health expert can ask one question of Him before entering heaven. The health expert chooses to ask God, "Will we ever have universal health insurance coverage in the United States?" To which God answers, "Yes, but not in my lifetime."

This joke summarizes the prospects that policy experts have typically seen for universal coverage in the United States. For senior policymakers, this reflects the battle scars earned in past national battles over universal coverage, most recently, with the Clinton Health Security Act in 1994. There has been no serious national attempt at universal coverage since that time; for example, Democratic presidential candidate John Kerry focused much more on lowering health insurance premiums than on broad expansions of coverage.

All of this has changed over the past year. Perhaps the most vivid Ulustration of this sea change was the response of many to the bold proposal for health insurance expansion put out by presidential candidate Barack Obama.1 This plan called for $65 billion per year in health care reform, with most of the spending devoted to expanding health insurance coverage. Obama proposes to provide access to new purchasing mechanisms for insurance, subsidize its purchase by low-income families, and even mandate that all children in the United States gain insurance. The reaction when this plan was revealed? Disappointment that he did not go further! Unfavorable comparisons were drawn in particular to the proposed plan of candidate John Edwards, who had proposed mandating insurance purchase for all, thereby guaranteeing close to universal coverage.

This reaction illustrates the influence of the fast-moving events of the past year. These events have mostly occurred at the state level, with a large number of states proposing dramatic new interventions to cover the uninsured. Most notable has been the health reform plan enacted by Massachusetts in April, 2006, which recently celebrated its first year anniversary. This sweeping biU reformed insurance markets, subsidized insurance coverage for a large swath of the population, introduced a new purchasing mechanism (the "Connector"), and mandated insurance coverage for almost all citizens. Once again, Massachusetts was responsible for a "shot heard round the world," or at least around the United States. The success to date of the effort in Massachusetts has led to similar proposals in a number of states, most notably by Governor Arnold Schwarzenegger in California.

In this article, I review the history of health reform in Massachusetts, highlighting the unique features that came together to make reform a reality in this state. I then turn to a discussion of the major issues that have been faced in the first year of implementing this reform, and the compromises made to maintain a broad consensus of support in the state. …

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