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Evaluating Massachusetts Health Reform

In April 2006, Massachusetts adopted an ambitious, broad-based health reform plan that expands coverage options in the state and requires individuals and employers to participate in the health insurance system or pay a fine. With support from The Commonwealth Fund, Sharon Long, Ph.D, a researcher with the Urban Institute, surveyed adults in Massachusetts before and after implementation of the plan to gauge its effect on coverage and access. The survey showed that after one year, the uninsured rate among working-age adults dropped by almost half, from 13 percent to 7 percent, and overall access to care improved. We spoke with Dr. Long recently about the achievements of the first year, the challenges of the coming year, and what other states can learn from Massachusetts' experience.

What were the biggest achievements from the first year of the Massachusetts health reform law?
Sharon Long: Although we did not evaluate this directly, one of the state's major achievements was being able to implement so many of the elements of the legislation so quickly. Because of that, when we looked at the impact one year after implementation began, we found large, significant drops in the number of uninsured individuals, improvements in access to care, and reduced costs of care.

Any disappointments?
Long: Our findings are strongly positive, but there are suggestions of potential problems in access to care, specifically in terms of finding or getting to see a doctor. Nationally, there's a shortage of primary care providers. But specifically within the state, it could be the additional stress on the system. The uninsured rate dropped from about 13 percent to 7 percent, so there are a large number of newly insured people. Another possible explanation is that new people—those who have not had insurance before—are finding it difficult to navigate the health care system.

And were there any surprises?
Long: One surprise was the continued support for reform in the state. The actual population covered under the reform has been much greater than projected—which in turn has made costs greater than anticipated. And yet support remained very high, and high across the board, too: among men and women, working and nonworking adults, and across different racial, ethnic, and age groups.

You mentioned the higher-than-anticipated costs. In addition to the larger numbers of enrollees, are there other reasons why costs have been high?

There is some suggestion that some of those who entered the health system have higher health care needs. Our results are certainly consistent with that. When we look at the population that remained uninsured in fall 2007, they are "the invincibles"—disproportionately young, healthy, male, and less expensive to cover.

What steps will Massachusetts have to take to control costs better?
Long: Our study found that there are opportunities to improve the efficiency of care delivery in Massachusetts. We found high levels of emergency room use, including high levels of ER use for nonemergency conditions, combined with problems getting to see a health care provider in the community. These findings suggest there are costs savings to be had by providing care in more appropriate settings. Beyond that, Massachusetts faces tough negotiations with hospitals and health plans to bring down costs if the state is to sustain health reform.

In the next phase of your evaluation of the Massachusetts reform, you'll be looking at the impact of the individual insurance mandate. What are you going to be looking for and what do you expect you might find?
Long: It became increasingly difficult over the fall of 2007, when the survey was fielded, to find uninsured adults. The mandate went into effect in December 2007, and it seemed that people were responding over time as it got closer to the effective date. This fall, when we go into the field again, it will be very interesting to see what has happened to the uninsured rate. We've included a new question about respondents' perceptions of how the individual mandate affected their behavior. Did they purchase insurance because of the mandate? Did they decide to stay uninsured and just pay the tax penalty? Did they do some kind of cost-benefit analysis to make that decision? And then, of course, we'll also be looking at the remaining individuals who are still uninsured in fall 2008.

What will Massachusetts have to do to improve coverage further?
Long: Moving even closer to universal coverage among working-age adults will be challenging. The uninsured are disproportionately young, healthy, and male. Very few have access to employer-sponsored coverage. Most report it would be difficult to obtain coverage and come up with the money needed to pay for it.

Has the state developed any strategies for reaching out to that population?
Long: Some of the provisions in the reform—the young adult plan and the allowance for dependent coverage to be available up to age 26—are targeted toward these people. With the individual mandate kicking in, people who have been more hesitant may actually have made moves in that direction. It will be interesting to see whether we see that shift.

Are there initiatives under way to improve access to care?
Long: There are some solutions focused on increasing the supply of providers. The Blue Cross Blue Shield of Massachusetts Foundation and the state have joined together to initiate a loan forgiveness program with primary care providers. There are also incentives to bring in providers from other states.

Massachusetts seems to be having a lot more success with its plan than Maine has with its Dirigo reform, which was implemented a few years earlier. Why do think that might be?
Long: As I said earlier, one thing that's been very impressive in Massachusetts is how fast they were at implementing major components of their legislation. Many other states have passed reform efforts but have had a difficult time implementing the programs or have started quite slowly, so enrollment has not grown at the pace that Massachusetts experienced. Also, the program in Massachusetts is not limited to only certain populations, like low-income adults—it's a broad-based expansion that has affected many people in the state.

What's the key lesson states can take away from the Massachusetts experience?

Long: At a very basic level, if you provide access to affordable insurance, people will enroll. If you provide insurance that people can afford, they will take up that coverage.

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