Lessons from Massachusetts about the impact of health reform
I suppose I was naïve, but I really thought we’d be making progress on health reform this fall. Instead, we’re still mired in contentious debate based as much on fear as facts. One concern is the possibility that health reform could undermine employer-sponsored health insurance coverage—the backbone of the US health care system. Massachusetts, which has mounted an ambitious initiative with many of the same features currently under consideration at the national level, offers a real-world case study of what health reform can mean for employer-sponsored insurance (ESI) coverage.
The bottom line? ESI was not weakened once health care reform took hold in Massachusetts, which now enjoys the country’s lowest rate of uninsurance. Indeed, ample evidence suggests that the 2006 health care reform law significantly boosted ESI coverage, countering the trend toward lower ESI coverage in the rest of country.
In a new paper released today in Health Affairs, we look closely at how employers have responded to health care reform in Massachusetts. Using survey data from workers in the state, we find that Massachusetts employers continue to offer health insurance coverage: Roughly 90 percent of workers reported that their employer offers ESI coverage to one or more workers under health reform. That’s the same percentage that offered prior to health reform. What’s different now? Under health reform, more workers in Massachusetts report that their employer offered coverage to them and more workers are taking them up on that offer. As a result, ESI coverage statewide is up from 80% of workers prior to reform to 84% in fall 2008.
Besides these gains in ESI coverage, workers in Massachusetts continue to report high levels of satisfaction with their health plans, with roughly two-thirds rating their plan as very good or excellent. The evidence from Massachusetts suggests that health reform has expanded both the availability and quality of ESI coverage in the state.
All that said, we are finding that workers in small firms in Massachusetts are facing increasing health insurance premiums and higher out-of-pocket health spending as health care costs in the state have continued to rise, as they have in the rest of the county. So far, workers in Massachusetts aren’t reporting that higher health care expenses are preventing them from getting the health care they need. But that is likely to change if costs continue to rise.
Finally, the rising health care premiums and increases in other out-of-pocket costs in Massachusetts don’t stem from health reform, rather they reflect the same factors that are driving higher health care costs in the rest of the country. Nevertheless, a critical next step for Massachusetts is to rein them in if it wants to sustain the significant gains in coverage that have been achieved under health reform and maintain its strong ESI system. Failing to address rising health care costs is likely to lead to a loss of ESI coverage in the future.
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