When Massachusetts residents file their income taxes this April they will be required to complete an additional form -- the Schedule HC -- to prove that they had health insurance in 2007.

Under a 2006 law, almost all Massachusetts residents must obtain health insurance (a 2007 addition to the law exempts some low-income residents). Those who don't could face fines and tax penalties.

In December, the state announced that about 300,000 people had enrolled in some form of health coverage since the law took effect. Many low-income residents took advantage of state-subsidized insurance plans under Commonwealth Care, some were covered under Medicaid and others purchased insurance through their employers or on their own.

The significance of the number of new enrollees is difficult to determine due to conflicting numbers of uninsured residents prior to the reform. The state previously estimated that there were about 372,000 residents without health care, but has since revised that number up to 400,000. Federal estimates, however, project that up to 600,000 people in the state lack healthcare.

Taking both figures into account, between 100,000 and 300,000 Massachusetts residents are likely still not covered, despite the universal mandate.

Measuring success
Jon Kingsdale, director of the Massachusetts Health Connector, the agency responsible for overseeing the mandate, said that the number of enrollees is only one indicator of the law's success.

"The larger point is that while the rest of the nation has been going the opposite direction…we're making substantial progress in insuring the uninsured rather than adding to the rolls of the uninsured," he said.

Kingsdale also lauded the state's efforts to spread awareness about the new laws. That outreach includes a $4 million marketing campaign to educate the public about their personal obligation under health reform, coordinated by New York public relations firm Weber Shandwick, the Boston Business Journal reported. Local organizations, such as the Boston Red Sox and interfaith groups, were integrated in marketing plans, Kingsdale said.

Such outreach efforts will continue through this year. The Connector board voted in January to renew the Weber firm's contract for about $1.8 million.

"We expect that the imposition of 2007 year penalties, coupled with the new recognition that there will be higher penalties in 2008, will trigger some public confusion and concern," Connector officials wrote in a Jan. 4 memo to its board. Other organizations, including hospitals and immigrants’ groups, have also worked to educate residents about the new law.

"Because the rules for Commonwealth Care are [now] a little bit more expansive, immigrants who have not been eligible for MassHealth for about the past three to four years, now are potentially eligible for Commonwealth Care, and so getting them into the system was really critical," said Carly Burton, policy associate for benefits access for the Massachusetts Immigrant and Refugee Advocacy Coalition.

Even undocumented workers who file state taxes using individual taxpayer IDs fall under the law.

Controlling costs
But 18 months into the health reform, some of the biggest challenges of implementation may still loom ahead -- notably reigning in spiraling costs. Money spent on health care in Massachusetts increased about $1.2 to $1.4 billion for the fiscal year ending July 30, 2007, Kingsdale said. That includes revenue from private insurance premiums and employer spending, as well as state and federal appropriations.

Much of the spending goes toward subsidizing low-income residents under Commonwealth Care. The state expanded the range of eligibility -- opening the program to low-income residents who earn up to 300 percent of the federal poverty level. The state had planned to fund the program mainly by using money saved from taking people out of the free care pool, now known as the Health Safety Net. But enrollment for the state-subsidized plans far exceeded expectations -- about 170,000 people have enrolled, compared to a projected 140,000.

The Connector now expects that state-subsidized insurance will run about $150 million over budget for the current fiscal year.

"There's simply no question there is not a dollar-for-dollar offset from taking people out of the free care pool and adding them to the rolls of the insured on a subsidized insurance plan," Kingsdale said. "That said, it is a very good dollar spend."

To help offset rising costs this year, the Connector Authority board passed a proposal in December that would cut payments to health care providers by 3 to 5 percent, the Boston Globe reported. Board member Patrick Holland said that the change would bring payments in line with those of Medicaid, according to the meetings' minutes.

Not everyone feels that decision is fair. Dr. Dale Magee, president of the Massachusetts Medical Society, says that Medicaid payments are below cost for many doctors. "It's more an act of charity to participate in some of these plans," Magee said.

In a Dec. 15 post on its blog, the Medical Society suggested that "the Authority’s decision will adversely impact patient access and physician practice viability, and runs counter to the Legislature’s investment and commitment to support providers who have supported expanding access to care.”

Magee fears that rising costs may begin to shift to patients. Indeed, the Connector board approved another plan that would require 3,500 patients to move out of insurance plans that had allowed them to pay low per-visit co-payments in exchange for higher premiums. That option had proved expensive for the state, as it “attracted the oldest and the sickest patients,” according to the Globe.

Connector Secretary of Administration and Finance Leslie Kirwan said that the changes were an attempt "to make this great healthcare reform effort sustainable," the Globe reported.

Still, Massachusetts may see a boost in revenue from fines imposed on those who still have not enrolled in a health plan. Residents who did not purchase insurance by Dec. 31, 2007, and for whom it was deemed affordable, will lose their 2007 tax refunds -- about $200 for a single person.

The penalties will rise steeply in 2008. The Massachusetts Dept. of Revenue released draft guidelines for the new fines in late December, with rates ranging from $210 up to $912 per year, based on an individual's income. The fines are calculated to equal about half the cost of the lowest priced health insurance plan for which an individual would be qualified, and are higher for people 27 and older. Residents earning up to 150 percent of the federal poverty level will remain exempt from penalties.

“We have worked to craft these penalties in a manner that is straightforward and easy to understand,” Revenue Commissioner Henry Dormitzer said in a statement. “We hope they will help encourage people who can afford health insurance to buy it and enjoy its many benefits.”

Still uninsured
Despite the threat of fines, thousands in Massachusetts have still abstained from buying health coverage. Both Kingsdale and Magee cited examples of people for whom medical care is not perceived as a necessity. Such people -- sometimes referred to as “young invincibles” -- may hold out on buying insurance until the fines begin to exceed the lowest-cost health insurance option.

For others, the cost of coverage remains too heavy a burden. “There are folks who maybe understand the need for [health care], would like routine access to routine care and preventive care, but simply cannot afford to buy insurance,” Kingsdale said. “They're not eligible for publically subsidized insurance, and say what their employers offer them carries a cost that they simply cannot afford.”

To keep expenses low, some patients have opted to buy insurance with the lowest possible monthly premiums; but that is often accompanied by high deductibles, which must be paid off out-of-pocket at every hospital and doctor's visit before insurance kicks in. As a result, Magee said, such patients are afforded little more than "disaster coverage" and annual exams, despite their membership in a health plan.

Still, both Massachusetts lawmakers and medical professionals appear committed to see health reform in the state succeed. Gov. Deval Patrick approved an additional $400 million in the 2009 fiscal budget to cover the health insurance initiative, the Globe reported.

“It’s a situation where everybody's going to be put under stress,” Magee said. “And it is a situation that is going to require everyone to constructively work together and not point fingers.”

-- By Candace Nuzzo, Online NewsHour