Getting Ready for Reform: Insurance Coverage and Access to and Use of Care in Massachusetts in Fall 2006

CoverageAccessReformUse}getting ready f o r reformInsurance Coverage and Access to and Use of Care in Massachusetts in Fall 2006{A report to}Blue Cross Blue Shield of Massachusetts FoundationThe Commonwealth FundRobert Wood Johnson Foundation{Prepared by}Sharon K. LongMindy CohenThe Urban Institute2100 M Street NWWashington, DC 20037Full Report {1}{getting ready for reform}Insurance Coverage and Access to and Use of Care in Massachusetts in Fall 2006This report is meant to provide a snapshot of Massachusetts’ adult population prior to the implementation of new health reform legislation in the state. Using survey responses obtained in Fall 2006 as the Bay State began implementing a landmark effort to bring near-universal health coverage to its population, this report serves as the baseline for an on-going study of the effects of the reform efforts on Massachusetts’ working-aged adult population. We focus on the overall adult population aged 18 to 64 years old in Massachusetts, as well as those targeted by specific elements of the state’s reform efforts, including uninsured adults and adults with family income less than 100% of the federal poverty level (FPL), between 100% and 300% FPL, and between 300% and 500% FPL. We describe their insurance coverage and health care experiences in the period prior to the full implementation of the major health reform provisions. The goal of this report is to provide information to support Massachusetts’ efforts to implement the health care reforms. In subsequent work, we will document changes in insurance coverage and health care experiences as Massachusetts fully implements its health reform initiative. In April 2006, Massachusetts enacted a health care reform bill that seeks to move the state to (almost) universal coverage through a combination of Medicaid expansions, subsidized private health insurance coverage, and insurance reforms.1 The key features of Massachusetts’ initiative, entitled An Act Providing Access To Affordable, Quality, Accountable Health Care (Chapter 58 of the Acts of 2006), are:• A Medicaid (called MassHealth in Massachusetts) expansion that extends coverage to children with family income up to 300% of FPL,• The elimination of enrollment caps for Medicaid coverage for several populations, including long-term unemployed adults, disabled working adults, and persons with HIV,• Income related subsidies for health insurance (called Commonwealth Care) for adults with family income up to 300% FPL, • A new purchasing arrangement, called the Commonwealth Health Insurance Connector Authority (or Connector), to link individuals without access to employer coverage and firms with fewer than 51 workers to health plans,2 • Health insurance market reforms that merge the small and non-group markets in an effort to reduce the cost of non-group premiums, and, • An individual mandate that requires that adults have health insurance if they have access to an affordable health plan (as defined by the Connector) or face tax penalties.In addition, employers are required to set up a Section 125 plan (or “cafeteria” plan)3 for their workers, so that employees can pay for health insurance premiums with pre-tax dollars. Employers with more than 10 employees who do not make a “fair and reasonable” contribution towards their workers’ health insurance will be subjected to an assessment not to exceed $295 per full-time equivalent worker per year.4 To date, the state has expanded Medicaid coverage to higher-income children and as of July 2006, made Commonwealth Care available to adults with income less than 100% FPL as of October 2006, and to adults between 100% and 300% FPL as of January 2007. Initially, adults with family income less than 100% FPL received coverage 1 For a summary of the provisions of the legislation, see http://www.bcbsmafoundation.org/foundationroot/en_US/documents/MassHCRe-formLawSummary.pdf.2 The Connector also operates Commonwealth Care, the subsidized health insurance plan for adults with incomes below 300% FPL.3 Under Section 125 of the Internal Revenue Code, employers can allow their employees to pay for health coverage (and other benefits) on a pre-tax basis. Pre-tax benefits lower payroll-related taxes for both the employer and employees.4 The Massachusetts Division of Health Care Finance and Policy defines an employer that makes a fair and reasonable contribution as either (1) covering at least 25% of employees or (2) contributing at least 33% of the total premium for coverage. {2}with a full subsidy; the full subsidy was expanded to adults with incomes less than 150% FPL in July 2007. Health plans under the Connector were made available to higher income adults as of May 2007 (although some provisions have been delayed until January 2009). The individual mandate went into effect in July 2007.{data}The study is based on telephone interviews with a sample of 3010 adults aged 18 to 64 years old in Massachusetts.5 The survey was