Massachusetts struggles with health reform law

Massachusetts Gov. Deval Patrick has been boasting that his state's health reform initiative has reduced the number of uninsured by half, with nearly 300,000 more people added to the health insurance rolls. What he doesn't say is that four out of five of them are relying heavily on taxpayer subsidies for their coverage.

Of the 293,000 people newly insured in Massachusetts:

• 160,000 earn less than $63,600 (for a family of four) and are enrolled in taxpayer-subsidized plans. More than half of them pay no premiums, and most others pay only a modest amount.

• 70,000 people were added to the rolls through expansion of the state's Medicaid program.

• Only 63,000 -- or about one in five -- have purchased private insurance.

Further, about 60,000 are being exempt from the mandate that all citizens must buy coverage, showing how elusive the goal of universal coverage will be, even for a state that had a relatively low uninsured population to begin with.

And costs are still an issue:

• Massachusetts now estimates that its spending on the new program for the uninsured may exceed its budget by nearly $150 million.

• The penalty for not complying with the mandate is steep. Individuals who don't get insurance this year -- or don't get an exemption -- will face a fine of $912, four times last year's penalty and scheduled to increase each year.

• The state "negotiated" with the health insurers participating in the Commonwealth Connector to keep premium increases to about 5% this year. But the insurers said in order to keep their prices down, they warned they have to increase copayments and/or deductibles and/or cut benefits. Many newly-insured say they have trouble finding primary care physicians who will see them.

• And to show how hard it will be to get to a point that everyone will be able to get "coverage as good as members of Congress have," in Massachusetts, a gold-plated Blue Cross Blue Shield plan in the Connector would cost a family of four about $23,000 a year.

Further, the state is trying to figure out what to do with those businesses that already are offering coverage but whose policies don't comply with the higher standards set by the government. Should they be exempted, forced to pay for more expensive coverage, or be fined?

Gov. Patrick and other governors were in town this week pleading with Congress to reverse the administration's Medicaid and SCHIP reform policies, saying they would threaten their ability to expand or even sustain coverage. That's because Massachusetts and other states rely heavily on federal payments for their expansion plans. The president wants them to focus on covering poor children and needy citizens first.

Since the Bay State's initiative is being seen by many as a model for the nation, it's important to pay attention. There is clearly no Massachusetts miracle here. Other states should certainly be cautious before proceeding.