• Mission & Governance
• Services Overview
• How to Get Involved
• Standing Committees
• NCSL Foundation

• Issue Areas: A-Z
• State-Federal Relations
• NCSL Standing Committees
• News from D.C. and the States

• About State Legislatures
• Elections, Campaigns & Redistricting
• NCSL's StateConnect Directory
• Web Sites

• Online Guide to NCSL Services
• Staff Sections and Networks
• Meetings & Professional Development
• Staff Directories

• Meetings Calendar
• Online Registration
• Meetings Home Page
• Legislative Summit

• Bookstore
• State Legislatures Magazine
• NCSL's StateConnect Directory

Critical Health Areas Project (CHAP) Newsletter 

Volume 1, Issue 2

May 17, 2006

In This Issue

Healthcare Access

Announcements Health Reform in Massachusetts web-conference ~ May 31 Featured Topics: Massachusetts’ near-universal health insurance law Vermont’s new health plan for the uninsured Other states looking at universal health coverage Useful Resources: Summaries & Analyses of Massachusetts’ new law Calendar of Events

Health Reform in Massachusetts web-conference

CHAP members and their staff are invited to call in to a one-hour web-conference on Massachusetts’ near-universal health insurance law on May 31 at 2:00pm EDT. A good portion of the one-hour conference will be dedicated to answering your specific questions about the reforms.

The measure includes a Medicaid expansion, state insurance subsidies, creation of an entity called the "Connector" to facilitate the purchase of insurance by individuals and small employers, and a requirement for individuals to buy insurance or face possible penalties. 

Speakers:

• House Speaker Salvatore DiMasi
• Rep. Patricia Walrath (Co-chair of Joint Committee on Health Care Financing)
• Christie Hager (Chief Health Counsel, Office of the Speaker)
• Emily Sherwood (Research Director)

Register here, or contact Joanne Stroud with questions. Any resources discussed at the web-conference will be posted on the CHAP website.

Massachusetts’ near-universal health insurance law

Massachusetts’ ground-breaking new health insurance law is complex, with many key details yet to be worked out. The politics of the bi-partisan reform were striking, with committed reformers across the political spectrum finding enough common ground to pass a law.

The law requires individuals to have health insurance by July 2007, or face financial penalties: in 2007, a loss of the personal tax exemption; and starting in 2008, a fine equal to 50 percent of the cost of health insurance during the uncovered period. Income tax forms will now ask about insurance status, and answers will be verified against an insurance industry database. The thinking is that requiring healthy people who were previously uninsured to enter the insurance risk pool will help stabilize costs.

Businesses with 11 or more employees that do not help pay for health insurance will now have to pay $295 per uninsured full-time-equivalent employee (the estimated cost of free care used by employees of non-contributing companies). If such a company’s employees access free care 5 times in total or more than three times by a single employee in a given year, companies will be assessed an additional “free rider” fee. Starting in 2007, all employers with 11 or more employees will be required to offer a “cafeteria plan,” which permits employees to purchase health insurance with pre-tax dollars.

The new law also creates the Commonwealth Health Insurance Connector (“the Connector”) to certify and offer health plans for purchase using pre-tax dollars by employees of small businesses (50 employees or less). These plans can be kept even when an employee changes jobs, and multiple part-time employers can contribute to a single individual’s policy. If an individual does not have access to an affordable health plan given their income, the Connector may exempt them from being penalized on their tax returns. The Connector will be operated as an authority under the Department of Administration and Finance, and overseen by an independent board.

The bill also creates the Commonwealth Care Health Insurance Program, which will offer subsidized plans with no deductibles. Adults with incomes below 300 percent of the federal poverty level will be eligible for sliding-scale subsidies, and adults below the poverty level will face no premiums. Funding for subsidies is expected to increase as use of uncompensated care funds decreases. New changes to Medicaid will expand access to children living below 300 percent of the poverty level.

Funding for the new provisions of the law comes from multiple sources, including shifting federal matching funds for Medicaid from paying for hospitals to paying for individuals’ insurance, and from $125 million from the state’s general fund (see table for more info).

John McDonough, a former health chair himself, was also one of the co-directors of the Health Chairs project for many years when he was at Brandeis.  Now as Executive Director for Health Care for All Massachusetts (HCFAMA), he has been keeping a blog on Massachusetts reform.  In addition to lots of inside baseball on the politics and policy from an impassioned front-line point of view, the blog contains no-punches-pulled analyses such as a summary of how the funding works titled, simply, "Health Reform: How Much Does It Cost & How Is It Financed?”

Sources	FY’07	FY’08	FY’09
Federal Safey Net Revenue	605.0	610.5	610.5
Federal Medicaid Match	184.6	242.1	299.6
Hospital Assessment	160.0	160.0	160.0
Payor Assessment	160.0	160.0	160.0
Free Rider Surcharge	50.0	40.0	25.0
Fair Share Assessment	45.0	36.0	22.5
General Fund	125.0	125.0	125.0
Existing Obligations
MCO Supplemental Funding	287.0	180.0	160.0
Free Care Pool/Safety New Fund	610.0	500.0	320.0
SubTotal	897.0	680.0	480.0
New Spending
Children to 300%	18.2	27.4	37.4
Restored MassHealth Benefits	48.0	53.0	58.0
Medicaid Rate Increase	90.0	180.0	270.0
Commonwealth Care Subsidies	160.0	400.0	725.0
Subtotal	336.2	660.0	1090.4
Total Spending	1,233.2	1,340.0	1,570.4
Three Year Balance	+116.4	+33.2	-167.9

Vermont’s new health plan for the uninsured

Earlier this month in Vermont, lawmakers passed H.861, creating a new insurance program for uninsured Vermonters and refocusing their health system toward chronic disease management. The “Catamount Health” plan will be (at least initially) voluntarily offered by private insurers, and will include a comprehensive set of state-determined benefits that are actuarially equivalent to the Selectcare point-of-service plan already administered by Cigna in that state.

Vermont estimates that 25,000 of the 60,000 uninsured in that state will choose to enroll in the plan. The program will be financed by enrollees (who will pay premiums based on income), as well as fees assessed on employers who do not provide coverage, an increase in tobacco taxes, and federal funds. (The state administration is to seek an amendment to its current Medicaid waiver for services provided to Medicaid-eligible individuals.)

The bill represents a compromise between the Democratic-controlled legislature and the Republican governor, who only agreed to sign the bill after the inclusion of a three-step process for offering Catamount Health. First, private insurers will have an opportunity to sell Catamount Health insurance voluntarily. If this does not work, then the state will mandate that insurers offer the plan. After two years, the Health Care Reform Committee will determine whether this approach is cost-effective, and if not, the state will assume the risk and contract with a third-party administrator to manage Catamount Health.

H.861 also includes provisions to improve chronic disease management and prevention, which is estimated to save $550 million over the next ten years by disseminating common outcome measures, best practices and protocols, data reporting requirements and payment methodologies.

For more information on Vermont’s new law, read NCSL’s summary and an issue brief by the Kaiser Commission on Medicaid and the Uninsured on Vermont’s Medicaid program and its new global commitment waiver.

Other states looking at universal health coverage

Other states interested in expanding access to health care will have to come up with their own combinations, as the Massachusetts reform rests on unique foundations that have been built over decades.

A week after Massachusetts’ law passed, California’s Assembly Health Committee voted 9-3 in favor of Democrat Assembly member Joe Nation’s bill – which includes "shared responsibility" provisions that require employers to contribute toward health care. For a taste of how California has approached assessing where it stands in relation to Massachusetts, check out Rick Curtis' analysis of what it would cost California to adopt Massachusetts-style health reform.  Besides giving a feel for what it would cost California, this is a model for other states that want to try similar analyses.

Other states are considering similar legislation – for a summary of states currently exploring universal health insurance laws, check out NCSL’s page describing 2006 bills on universal health care coverage.

Of course, other states have passed universal-style health insurance laws before Massachusetts’ most recent legislation. Maine passed the Dirigo Health Reform Act in 2003, aimed at providing every citizen with access by 2009. In 2005, Illinois passed the All Kids Health Insurance Program, creating a system whereby all children under the age of 18, if not already covered by their parents or by another state-sponsored program, could access coverage.  Hawaii, too, is often cited as an example of universal access; their plan, the "Prepaid Health Care Act" passed in 1974 with a unique ERISA exemption, requires all employers to offer health care coverage.

Summaries & Analyses of Massachusetts’ new law

Summaries of the new Massachusetts law:

• NCSL’s summary of the new law and State Health Notes article about the plan
• The Henry J. Kaiser Family Foundation has prepared a 2-page fact sheet
• Massachusetts’ legislature has produced an excellent act summary, PowerPoint presentation, and section-by-section summary
• John McDonough’s organization, Health Care for All Massachusetts (HCFAMA) has prepared a Q&A for consumers
• Governor Romney's partial veto message and press release (Note: the House overrode all of Romney’s vetoes, and the Senate has so far overturned all but two (Sections 112 and 27))
• CMS waiver submission for Massachusetts (if you want to really delve into details!)
• Roadmap to Coverage is the report by the non-partisan Urban Institute that served as a guide for policymakers in Massachusetts. It outlines three policy options, including implementation issues and options, mandate alternatives, and financing options.

• May 31 @ 2pm EDT. Health Reform in Massachusetts web-conference, (online/by phone). Join us for a discussion of the new universal health care law in Massachusetts with House Speaker Salvatore DiMasi (MA), Rep. Patricia Walrath (Co-chair of Joint Committee on Health Care Financing, MA), Christie Hager (Chief Health Counsel, Office of the Speaker, MA), and Emily Sherwood (Research Director, MA). The measure includes a Medicaid expansion, state insurance subsidies, creation of an entity called the "Connector" to facilitate the purchase of insurance by individuals and small employers, and a requirement for individuals to buy insurance or face possible penalties. A good portion of the one-hour conference will be dedicated to answering your specific questions about the reforms. Register here , or contact Joanne Stroud with questions.
• June 9 @ 8:15am-10:15am. Massachusetts’ Reform:  A Change of Paradigm? Washington, DC. Panel discussion at the upcoming Spring 2006 Health Chairs Meeting. Panelists will include Massachusetts State Senator Richard Moore; John McDonough (Executive Director, Health Care for All Massachusetts); Robert Moffit (Director, Center for Health Policy Studies, Heritage Foundation); and other invited speakers. A summary of this session will appear on NCSL’s website following the meeting.
• August 14. CHAP session at Annual Meeting, Nashville, TN. NCSL’s annual meeting is August 15-19 this year. We’re planning pre-meeting sessions for CHAP members and Chairs. More details on both meetings will be coming soon.
• August 16 @ 10:15am-11:30am. Lessons from the Massachusetts Universal Health Model, Nashville, TN. This panel discussion at the upcoming NCSL annual meeting will examine the various elements of the Massachusetts plan, the politics involved, and what other states may learn from the effort.

 Newsletter Archive