Health insurance gains detailed

By Elizabeth Cooney

The number of uninsured adults in Massachusetts fell by almost half last year, says a study released today, while the state’s Revenue Department reports that 86,000 people paid a state tax penalty rather than buy insurance.

Supporters of health insurance reform said both numbers were a sign of success, that not only are more people getting coverage, but that only a fraction of taxpayers contested the health-insurance mandate.

The study found widespread support for the two-year-old law among those who are already insured, with 71 percent favoring the effort. Among the uninsured, who are more likely to be subject to the tax penalty, the level of support dipped to 44 percent.

“This was the first test in the country of an individual mandate,” said Drew Altman, president of the Kaiser Family Foundation, a California-based think tank that was not involved in the research. “People didn’t know whether the citizens of Massachusetts would go along with it or rebel. They got the program off the ground with broad-based support, they have dealt with implementation problems they have faced so far, and they have covered more than half of the uninsured. So far it seems to be working.”

In the first year that state residents had to report their insurance status on their tax returns, roughly 86,000 who filed their taxes on time chose not to buy insurance and gave up their $219 personal tax exemption. Another 6,000 were deemed able to afford insurance, but are contesting the penalty. For about 62,000 filers, insurance was determined to be too expensive, and they were not penalized.

Penalties for those who can afford insurance will be higher this year, totaling as much as $912 for someone who goes all year without coverage.

In enrollment, the biggest improvement has been among the people least able to afford coverage. Among adults whose family income fell below 300 percent of the federal poverty level, the rate of those without insurance fell by almost half. For adults whose income was lower than the poverty line, the numbers dropped by two-thirds, according to the study, which was conducted by the Urban Institute, based in Washington, D.C., and appears in the journal Health Affairs.

The telephone survey of 3,000 working-age adults found that overall, 13 percent of respondents had no insurance in fall 2006, just before the law took effect. The rate fell to 7 percent of adults a year later, after an expansion in Medicaid, the creation of a state-subsidized plan called Commonwealth Care, and the introduction of a private purchasing plan called Commonwealth Choice.

The biggest remaining challenge is reining in the costs of providing care for those who qualify for subsidized insurance. The state has budgeted $869 million this year, nearly $150 million more than it anticipated, because of high enrollment, and expects costs to rise even higher.

“The long-run success of Massachusetts’ efforts will hinge in part on sustaining support for the new policies in the face of these higher costs,” according to the study.

Continuing medical inflation combined with a slower economy are also worrisome. And another glitch: The jump in insured people has not been matched by a rise in the number of doctors.

“There are 355,000 newly insured people over last year,” said Jarrett Barrios, president of the Blue Cross Blue Shield of Massachusetts Foundation, one of the funders of the Urban Institute survey. “In that year there were not enough new primary care practitioners coming online to accommodate these folks. In many important ways, health reform has been a victim of its own success.”

But Brian Rosman, research director of Health Care For All, a local advocacy group, said he hears what coverage means to the 700 people who call a help line each week.

“Again and again we find formerly uninsured people who were ignoring serious medical needs now have coverage and now say the program is literally saving their lives,” said Rosman, who helped write a second paper in Health Affairs.

The survey also allays one early concern: A fear that businesses would cut benefits once the state began offering subsidies. Employers did not appear to have reduced the insurance they offered to their workers, judging from the stable levels of adults who said they could get coverage at work both before and after the law took effect.

More low-income people went to a doctor or a dentist for a check-up in the past year, but people still had trouble finding a primary care provider, the survey found. Emergency room visits didn’t budge from their high levels before the healthcare law passed, suggesting unfamiliarity with the healthcare system or reflecting a nationwide shortage of doctors available to treat prospective patients, said Sharon K. Long, the survey’s author.

The survey found that last year, out-of-pocket spending on healthcare, mostly for prescription drugs, fell, as did the proportion of adults saying they were having problems paying their medical bills.

“Clearly the drop in the uninsured rate is an impressive first-year drop and a significant finding,” Long said. “It’s not just the gain in insurance coverage, but access to care and affordability of healthcare for individuals that has improved with insurance coverage. This is a broader change than just expanding coverage.”

Copyright 2008 Globe Newspaper Company

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