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Mass. Health Care Plan Praised, But Struggles With Cost

April 28, 2008 at 6:35 PM EDT
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Massachusetts' universal coverage plan has helped thousands of the state's residents gain health care -- but critics remain wary of the high costs of the program, both expected and unexpected. Susan Dentzer reports on how the Bay State is faring in its reform efforts.

JUDY WOODRUFF: Now, how Massachusetts is faring in its efforts to provide health care to the uninsured. Our report comes from Susan Dentzer of our Health Unit, a partnership with the Robert Wood Johnson Foundation.

SUSAN DENTZER, NewsHour health correspondent: Stephen Gore is an information technology specialist in Massachusetts. He had just battled kidney cancer when he lost his job and his private health insurance last year.

STEPHEN GORE: I had no income, no health insurance, and I was a year-and-a-half out of cancer treatment. My wife and I were pretty hopeless. We were a mess. We were just — we didn’t know what to do. We didn’t know where to turn.

SUSAN DENTZER: But Gore and his wife soon learned they were eligible for coverage under a new Massachusetts program for the uninsured. They enrolled in the state-funded program and it began paying the bills for Gore’s post-cancer care.

STEPHEN GORE: I was able to go to see my regular specialist. I was able to have prescription coverage. We had the safety net, and that’s what saved my sanity during that time.

SUSAN DENTZER: The program Gore enrolled in, called Commonwealth Care, is one of many fruits of Massachusetts’ two-year-old health reforms. The key goal of those changes was to spread health coverage to the roughly 550,000 state residents who lacked it.

Now, says the state’s governor, Democrat Deval Patrick, the state is more than halfway there.

GOV. DEVAL PATRICK (D), Massachusetts: There are 300,000 adults and children who were uninsured just a year ago who are insured today and have access to quality primary care, and that’s great news.

It’s a thing in progress, but we have tried something. See, we’ve gotten off the dime. And those 300,000 adults and children who were insured this year who weren’t last year are getting great care.

STEPHEN GORE: I still have a little something under my ribs that I’m keeping an eye on.

State health care succeeds too well

SUSAN DENTZER: Yet one of the lessons learned is that there were many thousands more uninsured people than state officials once thought.

GOV. DEVAL PATRICK: In fact, I would say that the enrollment has happened faster than was projected, which is good news, but also created some financial challenges for us.

SUSAN DENTZER: As a result, the state expects the health reform package to cost roughly 10 percent more than anticipated next fiscal year. It's now looking for $150 million more in revenues to plug the gap.

Facts like these have made Massachusetts a real-life Rorschach test about attitudes toward health reform at the state and national levels. So as proponents celebrate the expansion in coverage, critics home in on the flaws.

Michael Tanner directs health and welfare studies at the Cato Institute in Washington, a right-leaning libertarian group.

MICHAEL TANNER, Cato Institute: Essentially, they flew over the state and dropped money on people and said, "You can use that to buy health insurance," and people did. What it has done is set up a situation in which you are beginning to see the dominoes fall to more and more government control of the health care system.

SUSAN DENTZER: And the critics aren't just political conservatives like Tanner, says John McDonough. He heads Health Care for All, a Boston-based advocacy group that backed the reforms.

JOHN MCDONOUGH, Health Care for All: We have health care policy fundamentalists on the right, and we have health care policy fundamentalists on the left, and they don't agree with each other on anything except that both sides hate this Massachusetts experiment and want to see it fail.

SUSAN DENTZER: The slings and arrows may be inevitable for a reform package designed to be so many things to so many people. They've included Mitt Romney, Patrick's Republican predecessor, who signed the reforms into law and whose administration is now blamed for underestimating the number of uninsured.

JOHN MCDONOUGH: We had a very curious amalgam of ideas and preferences that led to the passage of the 2006 law, a heavily Democratic legislature, which was divided among itself in terms of its preferences; a Republican governor who clearly, in his first year in office, said he wanted his mark on health care to be universal health care; the Bush administration in Washington, who actually wanted to take some money away from the state and who were convinced to let the state keep the money to be the financing engine to make this law possible.

SUSAN DENTZER: The result was a program that aimed to stretch health coverage in multiple ways, through both public programs and private health insurance coverage.

First, with the approval of the Bush administration and a sizable injection of additional federal dollars, the state's Medicaid program, called MassHealth, was expanded. About 65,000 kids and poor adults have now gained coverage that way.

DOCTOR: I see you're here today to follow up on your back pain.

SUSAN DENTZER: Next came Commonwealth Care, the new state program that enrolled Stephen Gore and others, like Crystal Kiklis. It offers free or heavily subsidized coverage for people with incomes up to three times the federal poverty level. That's about $31,000 for a single person or nearly $64,000 for a family of four.

CRYSTAL KIKLIS: I think it's getting a little worse now that I'm heavier.

SUSAN DENTZER: Kiklis came to the Lynn Community Health Center seeking help for back pain. She's now one of roughly 175,000 low- and moderate-income adults who've gained coverage this way.

CRYSTAL KIKLIS: It's actually a lot of difference because now I can go get new glasses. Physical therapy's covered. My doctors are covered. So now, if something does happen, I don't have to just say, "Oh, well, I can't cover it, I'm not going." It helps out a lot.

SUSAN DENTZER: Lori Abrams Berry, the Lynn Clinic's executive director, says the results have been notable at this and other centers serving the low-income and uninsured.

LORI ABRAMS BERRY, Lynn Community Health Center: Historically, 40 percent of our patients have been uninsured. Last year, the end of 2007, we were surprised to notice that only 23 percent of our patients were uninsured. And that's very clearly the result of the changes in Massachusetts where previously uninsured patients are now insured.

Mandate needed to cover all

SUSAN DENTZER: In addition to expanding public programs, Massachusetts also wanted more better-off people in the state to have private coverage, as most state residents now do. So businesses with 11 or more employees were also required to contribute to health coverage for their workers or pay an annual $295-per-worker fee.

So far, the state has determined that only about 750 firms will have to pay the fee since they're not contributing to workers' coverage.

Finally, through a new state organization called the Connector, Massachusetts created a kind of online food court where people can buy souped-up private health insurance plans. On the menu are new health plans offered by private health insurers, featuring better benefits at lower monthly cost.

Jon Kingsdale is the Connector's executive director.

JON KINGSDALE, Mass Health Connector: Before this went into effect, the typical uninsured individual in Massachusetts, who's a 37-year-old Bostonian, would pay about $336 for a health plan with very large deductibles and no drug coverage. And by our going onto the market, there's a range of plans available for literally half the price and twice the benefits.

SUSAN DENTZER: That left one major step: making sure everybody who could afford it actually bought private health coverage, whether they were sick and thought they needed it or healthy and thought they did not.

JOHN MCDONOUGH: If you only have sick people coming in, then the cost goes significantly higher than people are expecting and willing to pay, and then the programs have a very much more difficult time sustaining themselves.

SUSAN DENTZER: That led to the so-called individual mandate, a requirement that people buy coverage deemed affordable to them or pay a penalty to the state. Ron Norton, who makes about $40,000 a year teaching medical radiology at one of the state's community colleges, was one of those affected.

RON NORTON: I don't have a problem with mandating that everybody be covered. I do have a problem with mandating that people be covered by products that are unaffordable.

And, basically, I think what they've done here is create something which is unsustainable.

SUSAN DENTZER: Norton's community college job doesn't come with health insurance, and he says the cheapest private plan he could buy costs about $3,500 a year.

RON NORTON: The additional expense of insurance is just not something that I can bear right now. I would like to see everybody have access to health care, but I would like to see it done under a single-payer system.

SUSAN DENTZER: So rather than comply with the individual insurance mandate, Norton has elected to pay the state the penalty: $220 this year and $912 the next.

But at the same time, because of the mandate, the better private health plans, or both, more than 120,000 others in the state now have newly purchased health coverage.

Focus now on controlling costs

SUSAN DENTZER: Amid the mixed public verdict about the Massachusetts health reforms, dozens of questions remain. Chief among them is this: How can the costs of covering hundreds of thousands of uninsured people be sustainable over time, especially when the underlying rate of growth of health care costs is not?

LORI ABRAMS BERRY: We haven't tackled the cost problem in a serious way. And what it requires is much, much more work than insuring people.

It has all to do with our insistence on the most expensive technology and the incentives for using them, instead of building a very good primary care system such as we have here at the health center.

SUSAN DENTZER: So back in the state legislature, Massachusetts Senate President Therese Murray has introduced a bill that would broadly attack many elements of rapidly rising health costs.

THERESE MURRAY (D), Massachusetts Senate president: We have to figure out: Does everybody need the latest robot? Does everybody need the latest scan or laser? Why can't we have this done in one place and not replicate these kind of services all over the state?

SUSAN DENTZER: And experts say that, if the state can make inroads into that issue, it may pull off a true Massachusetts miracle.

JUDY WOODRUFF: As many of you know, Susan has moved on to edit a health policy journal. She'll continue to appear occasionally as a studio guest. And NewsHour correspondent Betty Ann Bowser will report health stories for us.