Trends in Massachusetts health insurance suggest what’s ahead


A report this week documents the changing nature of health insurance coverage in Massachusetts, since 2006. There are a few bright spots, and there are clear suggestions of developing trends. The benchmarks include the achievement of near universal health insurance coverage for Massachusetts residents, rising insurance premium costs in all segments of the market though some of these increases are less steep than they have been historically, and higher out of pocket costs for insureds as deductibles and co-pays rise. Deductibles jumped by more than 40 percent between 2009 and 2011, benefits declined five percent, and premiums rose nearly 10 percent.

The analysis, described by Center for Health Information and Analysis (CHIA) executive director Aron Boros and reported [Mass residents paying more for health care costs, August 20,2013] by writers for the State House News Service(SHNS), yields a decidedly mixed message, with implications for changes that will be experienced nationally as the Affordable Care Act(ACA), faltering now in its roll out, takes hold.

“It’s clear,” Mr. Boros says, “that patients increasingly have skin in the game.”

The 2006 state law, a deal worked out between then Gov. Mitt Romney and the legislature and a contributing model to the federal ACA, designed by the Congress and President Obama, has been unequivocally successful, measured by the statewide decrease in uninsureds. Ninety-seven percent of residents now enjoy some form of health insurance, which leaves about 198,000 residents without coverage. There has been some increase in the number of uninsured, likely reflecting the varying fortunes of residents since the 2008 Great Recession and the long, limping economic recovery.

The analysis shows that, since 2009, fewer Massachusetts residents are receiving health insurance benefits through their employers. The CHIA report found that just 62 percent residents get coverage sponsored and partially paid by employers. That is dramatically lower than the roughly 80 percent that enjoy employer sponsored health insurance nationally. And, the share of residents with employer-sponsored insurance fell sharply to 61.8 percent in 2011, from 67 percent in 2009. The percentage receiving coverage through Medicaid and Medicare rose significantly, a reflection of affordability and unemployment issues, according to Mr. Boros.

Broadening health insurance coverage across the state was job one for the 2006 law. No question, it’s done that. The governor and the legislature knew that job two, finding ways to reduce the cost of health services and consequently the cost of health insurance, would be tougher. The CHIA analysis confirms that expectation. Health care experts know that extinguishing fee-for-service health care is the key to driving down costs, but it hasn’t happened. Fee for service accounted for 64 percent of commercial payor enrollee health service payments in 2012. High priced providers – Massachusetts has many of them, many that are also high quality providers – are a problem. Negotiating with insurers, these providers get higher reimbursement rates, a bigger share of health care dollars, and they drive up premiums.

It’s a complicated picture, even for a state with fewer than seven million residents, and nevermind the challenges existing nationally for the Affordable Care Act. Disciplining this high quality, expensive, chaotic health care system, particularly in a moment of modest economic growth, presents political challenges that neither state or national leaders have demonstrated they are equipped to manage.