Massachusetts Health Insurance Law Truth - Truth vs. Spin

SPIN: "The Commonwealth has enrolled 432,000 in health insurance." “Under health care reform, 97.4% of Massachusetts residents have insurance.”
(Or whatever the number is that a politician, policy wonk or Connector member wants to SPIN at the moment)

TRUTH: The state significantly underestimated the number of uninsured residents before and during the first year and a half of the mandate's implementation. Their original estimate of uninsured residents was 372,000 - the real number was closer to at least 715,000, if not more. That's a difference of more than half.

So when the powers that be were happily publicizing a huge victory, it was a spun, concocted half-truth at best and still is.

Around July 24, 2008, a Harvard School of Public Health insurance expert claimed that there were “more than 300,000 new members Commonwealth Care and private insurance plans.” Per an August 20, 2008 Boston Globe article the number of newly insured had suddenly increased to 439,000 - 95% of Massachusetts residents were insured! This article contained the following quote: “Dr. JudyAnn Bigby, the state's secretary of Health and Human Services, said that the latest enrollment figures should bolster the state's case with the federal government.” (The state’s case needed bolstering because the Federal funding it so desperately required to keep this health plan afloat was not forthcoming on June 30, 2008 as expected, and the Governor et al were in a panic.) Around March 2009, the total had slipped to 432,000 “newly” insured with 97.4% of the state’s residents. Newly insured down,

percentage up? Maybe the state population decreased.

These data are derived from the Massachusetts Department of Revenue which counts only from tax returns filed for that year. It is known that not everyone files a tax return. In fact, it is 10% or more of citizens do not file tax returns at all. So, following a logical progression, these are vastly underestimated and false numbers.

Giving the self-proclaimed victors the benefit of the doubt, we’ll use the 97.4%. However, here’s the catch - that would be 97.4% of the 86% expected to file a 2007 tax return and include a completed Schedule HC claiming they had health insurance according to a June 2, 2008 D.O.R. report. An October 2008 D.O.R. report showed 95% insured of the approximately 96% of expected tax returns for tax year 2007. One month the D.O.R. expects 86% to file; a few months later it expects 96% to file? Could be. That said, the same October D.O.R report shows 95% of whatever percentage it has decided to use while the Patrick administration (EOHHS Division of HCFP) was using 97.4% and still is. It’s a numbers game. March 2009 enrollment figures in Commonwealth Care show that 72.5% are fully subsidized (free), 15.15% are nearly free, leaving only 12.25% of this lower-income group paying any substantial but still heavily subsidized premium. Nearly 110,740 have been enrolled in MassHealth (Medicaid) since passage of the law. March figures also show that there were 12,420 subscribers in Commonwealth Choice - private insurance for the not-so-poor. The vast majority of these are in high co-pay, high-deductible plans which are very expensive for the value of the coverage and offer little to no relief from medical debt if a member were to become ill. In fact, many have found that they can’t afford to access care because of the high deductible and co-pays in the cheapest of these plans.

We have no doubt that it is a wonderful thing to bring health care access to some low-income people who previously had no chance for this, but other lower and middle earners cannot afford it and are having a difficult time with premiums and co-payments or are still uninsured and had to pay costly penalties. Is the MA plan successful if it benefits only one small segment of the population but hurts a larger number to do so?

On July 1, 2008, premium-bearing, state-subsidized plans for residents 300% FPL and below went up 10% and co-pays increased 50% to 100%. That's a lot of money for those who struggle daily to survive and is not what they signed up for just a few months before. The Connector was presented with a statewide survey conducted by outreach workers showing that residents couldn’t afford the 2007 premiums and co-pays, but all were increased nonetheless. See statewide survey here.

The following is a testimony from the Suffolk University 2008 brief on Women and MA Health Reform:

“KK is a type-1 diabetic working full-time as a pharmacy technician. A former free care recipient, she now is covered by Commonwealth Care. Based on her weekly net income of $339, she is eligible for the Tier 3 subsidy. Her current premium is $70 a month. Her out-of-pocket medical expenses for her diabetes medications are $10 for generic and $20 for name brand until her annual cap of $500 is reached for prescription drug co-pays. Until she reaches that cap, she picks and chooses which medications to purchase, sometimes skipping one or two prescriptions if her income is insufficient. Given her low income, KK would like to work overtime whenever possible. However, she needs to be careful not to earn enough to push her Commonwealth Care level to Tier 4, which would result in higher co-pays than she can afford. KK worries that if her income increases by even a relatively small sum, she will lose her Commonwealth Care eligibility and will be required to find much more expensive alternatives.”

At the time of this writing, Connector CEO Kingsdale gleefully announced that in July 2009, some but not all subsidized plans will decrease by an average of $2.44 monthly. That doesn’t even cover the cost of the 2008 increase, and what’s with the average and some but not all? No mention was made about the co-pays. The Commonwealth Choice plans will increase 3.5% although many are having difficulty paying the current price and can’t afford to use the insurance.

On page 10 (page 6 in the pdf) of the November 2008 Healthcare Ledger cover story, Joe Kirkpatrick, Vice President of Health Care Finance at the Massachusetts Hospital Association (MHA) asks, “Whatever Happened to Health Care Reform?” MHA was among the lobbyists on Beacon Hill that paid at least $7.4 million for this law.

Be careful, you might get what you lobbied for!

SPIN: "The law accomplishes universal or near-universal coverage."

TRUTH: The state decided to exempt nearly 20% of uninsured adults from the requirement to purchase health insurance because their incomes were too high to justify subsidies but too low for what is deemed “affordable” by the state.

Early on in 2007, using the original false estimate of the number of uninsured, the Connector reported that this would amount to about 2% or 60,000 residents. A D.O.R. October 2008 report showed 76,000 or 1.9% of tax filers. We did the math and came up with 128,743 based on a 2006 census which showed a total population of 6,437,193 in Massachusetts. Whatever the number is, this means that there is a large population without health insurance who are may not be receiving necessary medical care and are at risk for medical debt. As of May 2009, we haven’t heard that the Connector has come up with a remedy for this part of the population.

Residents who fall into this group are the "legally uninsured” and did not lose their personal state exemption when they filed their 2007 return if they filled out the eligibility form and were informed by MassHealth before the end of 2007 that there was no “affordable” plan available. They did not face a penalty for 2008 either as long as they filled out another eligibility form and were notified by MassHealth before the end of 2008 that there was no plan available. However, they will become part of this government-sanctioned purgatory of penalties should their income change, and they are deemed able to afford insurance - even if they can’t.

The architects of this law also anticipated the many tens of thousands who would neither be legally exempted nor able to pay for insurance and included an estimate of their penalties in the “health care reform” budget. These are the “law-breaking uninsured” - the criminals. Fines for businesses that did not comply were also included in the budget. The plan was to have penalty-paying individuals and the fine-paying businesses help pay for the fully-subsidized residents. However, the entire set-up was, and still is, a Ponzi scheme based on money the state doesn’t have. The fines for the businesses came in far short of the estimate due to either nonpayment or bad judgment on the part of the financial crew involved. Here is an ironic piece of trivia: Mr. Ponzi was from Boston.

Per the report from an April 3, 2009 meeting for outreach workers in Amherst (western Massachusetts), we read that Commonwealth Care members are dropping their coverage because they can’t afford the premiums, and some student clients are opting out of their inadequate school-based insurance, choosing to pay the mandate penalty instead.

In fact, enrollment in Commonwealth Care dropped from 176,307 in September 2008 to 165,003 in March 2009. Did 11,304 residents find jobs with insurance? Did they leave the state? Or are they uninsured with no medical care and subject to tax penalties?

Imagine the recent college grad who has just landed a job, has to pay back college loans, and his or her employer doesn’t offer health insurance. Now there’s also a monthly premium to pay on top of the loans. The Young Adult Plans are expensive and have crummy coverage, so hopefully, these young people don’t get sick and have to use the insurance.

This law does not mandate health insurance for children under 18 years of age.

SPIN: "The state can control rising medical costs through existing laws and bargaining with insurers."

TRUTH: Some plans won’t cover certain areas of the state, and the lowest-cost Commonwealth Care plans tend to have less of a provider network, further exacerbating the problem of finding a PCP or specialist. Limited PCPs enrolled in the health plans also means long waits for appointments and/or great travel distance because there are no PCPs nearby who will take Commonwealth Care patients. Also, lack of available appointments at some of the health centers that have no evening or weekend hours affects those who are hesitant to miss work.

A D.O.R. October 2008 report showed 76,000 or 1.9% of tax filers. We did the math and came up with 128,743 based on a 2006 census which showed a total population of 6,437,193 in Massachusetts. Whatever the number is, this means that there is a large population without health insurance who are may not be receiving necessary medical care and are at risk for medical debt. As of May 2009, we haven’t heard that the Connector has come up with a remedy for this part of the population.

Because Commonwealth Care is a public-private mix, it must fit in with the commercial world, so the Connector does not have the authority to force insurance providers to accept these health plans. Although the Connector can put network requirements on the plans, if it were to make these requirements too explicit, it would lose the ability to negotiate rates with providers. So, instead, more general standards are created that must be met in order to be approved for a particular region. Boston, like the western and central regions of the state, faces problems with network adequacy such as community health centers and hospitals contracting with Commonwealth Care plans in mismatched ways.

Sometimes residents who have difficulty accessing services through a less expensive plan are advised by outreach specialists to submit a plan change form, but if the request is made outside of the annual open enrollment period, it will most likely be denied.

Trying to link an affordable plan option with a participant's physician preference is at times difficult. Coordinating network selection for participants with chronic conditions is even more daunting. In a number of cases, participants have been forced to choose between maintaining a relationship with a PCP, specialist or hospital provider because of network differences. The continuing trend has been for the doctors and hospitals to contract with only one or possibly two of the Commonwealth Care network choices.

When residents change income categories and move into a new plan type, they may experience significant increases in monthly premiums. This could also mean a resident will have to find different doctors and use a different care center or hospital which interrupts continuum of care and is discouraging.

On the surface, there's been little formal dialogue with or feedback from the medical community about perceptions of the Massachusetts health insurance set-up. When we have engaged in dialogue with some hospital and doctor’s staff in various parts of the state, we have not found high regard for this system. Some say that the law is bittersweet. Others say flat out that it’s not working. However, doctors, for the most part, are reluctant to publicly state that they don’t like the system due to fear of reprisal although we have seen some critical letters in newspapers.

SPIN: "Penalties are fair and will encourage people to enroll."

TRUTH: The system was set up with a "carrot and stick" approach - the "carrot" being reduced-cost insurance for some and the "stick" being harsh penalties for others.

Penalizing individual-mandate violators who fail to obtain or maintain insurance is a dictatorial manner by which to promote the stated goal of providing health care to the residents of Massachusetts.

As the law is written, financial penalties for those who cannot afford insurance were as high as $912 per person for 2008 depending on age and location and have been increased to $1,068 for 2009. Influential community groups have pleaded with the Connector, the governor and members of the legislature to reduce or drop the penalties but to no avail.

The powers that be knew there were hundreds of thousands of residents who would not be in the financial position to buy the mandated insurance. As previously mentioned in this section, there is documented proof that penalty collection was planned as a means to partially fund the "health care reform". There is documented proof that penalty collection was planned as a means to partially fund the mandate.

A statewide survey conducted by an outreach group regarding the July 1, 2008 increase in premiums and co-pays for the partially-subsidized plans found that this would cause further hardship and discourage use of the insurance for many. This, too, was ignored by the Connector as the state sorely needed money whether it be from premiums, co-pays or penalties. The increase in premiums also represented an increase in penalties.

The working poor and middle class will always teeter on the edge of qualifying for either the Commonwealth Care subsidized plans or Commonwealth Choice “specially-priced” Connector plans because according to the guidelines, they are more likely to be slightly over-income for one or the other. Also, a segment of this population will have earned just over the mark for the Connector plans and end up on their own.

Income-based insurance mandated on a state or national level - subsidized or not - won’t offer this population reasonable choices that best protect their interests. The harder people are pushed to purchase unaffordable insurance under threat of a costly tax penalty, the more individuals and households with unpredictable and complex situations will be adversely impacted. This form of consumer manipulation is regressive and oppressive as it forces people to intentionally lower their incomes in order to qualify for lower premiums or penalties and leaves many without access to affordable care.

If you can't afford insurance, chances are you will have difficulty affording the penalty, even though it is less than the insurance. Massachusetts legislators must be under the impression that it’s possible to get blood from a stone. Or, maybe, they don’t even think about it because it doesn’t affect them. They are following the orders of their leadership - to support this no matter what problems constituents are facing. All eyes are Massachusetts. There is collateral damage, but they dared to do it. They are heroes.

See the 2009 Penalties

See the TRUTH INDEX