March 30, 2009 | last updated March 24, 2012 11:22 am
LABOR POOL

Eyes On Health Care Reform As Economy Falters

Since Massachusetts passed its groundbreaking health care reform law in 2006, its supporters and opponents have frequently come to verbal blows. The question is whether the changes it has wrought are a revolutionary step forward for health in the state or an excessive burden for state coffers and private businesses.

There may not yet be a definitive answer, but, in the face of the most severe recession in decades, some business leaders and state officials seem relatively OK with whatever burdens the reform imposes.

"I think it's going rather well," said Richard Kennedy, president and CEO of the Greater Worcester Chamber of Commerce.

The National View

A recent survey by Hewitt Associates suggests just how hard the recession is hitting health benefits nationwide. It found that 19 percent of employers plan to drop their health benefits over the next three to five years, up from 4 percent last year.

But Kennedy says that's not the case in Massachusetts. Thanks at least in part to the employer mandates in the health reform law, he said, most local employers aren't looking at the option of eliminating their plans.

And he said that's a good thing for the health of the state. Companies may have to wrestle with high insurance costs by raising co-pays and deductibles, but many are happy to be able to consider alternative plans that the state is now helping to arrange as part of the reform effort.

At the level of state spending, the reform law got a lot of flak early on due to the escalating cost of the subsidized Commonwealth Care program. Officials say that spending was spurred by an unexpected volume of uninsured people signing up for the program, and the situation is now largely under control.

Richard Powers, a spokesman for the Commonwealth Connector Authority, which oversees the reform effort, said the state budgeted $869 million to cover 165,000 people under Commonwealth Care in Fiscal 2009. Actual spending for the year is now projected at $820 million.

Powers said Gov. Deval Patrick has proposed spending $880 million next year to cover 180,000 people. He said the state projects increased enrollment in the program partly because it expects to continue reducing the ranks of the uninsured, bringing in some of the 2.6 percent of the state's population that still have no insurance, and partly because the recession may force more people to get subsidized care.

Mitigating Factors

That second factor isn't as big an issue as you might think, though. According to Powers, people who lose their jobs and end up receiving unemployment assistance will qualify for insurance under a program that the Division of Unemployment Assistance pays for. Many can also get help from a federally funded subsidy to help pay COBRA costs. It's only people who run out of unemployment, or aren't collecting for some reason, that may end up in the Commonwealth Care program.

In a particular sign of some success keeping costs down, the Connector Authority recently announced that premiums for Commonwealth Care won't rise next year. That change comes without any increase in co-pays or deductibles.

"It's a very well managed program," Powers said.

Of course, not everyone is convinced that the reform is a big step forward for health care in the state.

A recent study by the liberal Physicians for a National Health Program criticized the program for failing to substantially drive down health costs. Using a state cost estimate that includes not just Commonwealth Care spending but also Medicaid rate hikes, money for the state's free care pool and other expenses, the study claims estimated costs of the reform hit $1.1 billion in fiscal 2008 and $1.3 billion in fiscal 2009.

The study argues that more substantive reform, such as a government-sponsored single-payer system, is necessary to effectively reduce costs.

Still, even if the Massachusetts reform effort hasn't taken a bite out of the rapidly escalating cost of health care that all public and private employers face, many seem to think the state is in a better place than its counterparts that have left the status quo in place.

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