"From A National Perspective, So Far Much More Good News than Bad" by Drew E. Altman

As a former state cabinet officer in a big state and as a transplanted Californian who still calls Massachusetts home, I have nothing but admiration for what the Bay State has done in putting together its health reform plan. Some are quick to point out that Massachusetts had a more modest uninsured problem than other states and Federal Medicaid money to play with that many other states don't have. True enough. The potential loss of $385 million in federal funds can bring remarkable focus. But viewed from a national perspective, Massachusetts has shown that it is possible to break through the ideological and policy logjam between Left and Right that has prevented action on health reform nationally for so many years. Massachusetts did this by assembling a broad-based coalition and putting together a plan that gave all sides at least something they could like about our fragmented health system; it built on public programs, the employer-based system, and insurance purchased in the non-group market by individuals, and it improved payment levels for providers.

In many ways, Massachusetts’ weaknesses come from its strengths. The plan does not satisfy purists on the Left or the Right, precisely because it represents an amalgam approach; it is not single payer nor is it a pure market approach. The plan does not cover everyone because pragmatic decisions were made to overcome implementation obstacles rather than let the plan blow up. Two percent of the state’s total population and approximately 20 percent of the uninsured population has been exempted from the mandate to have insurance because these people could not afford it.

A few key health policy lessons have also emerged from Massachusetts.

One is that subsidized public coverage has been the backbone of the state's success so far in expanding coverage with over two-thirds (68%) of those who were previously uninsured covered through that route. No big surprise here; most of the uninsured are lower income people who simply can't afford health insurance and need a substantial subsidy to get it. The other lesson, mostly overlooked so far, is that the individual mandate has worked pretty well, or at least not caused a political firestorm. This is the first real test of an individual mandate in the nation. No one had any idea whether it would fly or the citizens of the Commonwealth would simply say, "Hell no, I won't go!" So far it is still flying.

As is well known to state officials and outside observers, over the long term the state will need to grapple with how to ensure that the non-subsidized plans offered to residents are affordable and with relieving the considerable pressure paying for the plan puts on the state budget. In addressing the second challenge, it is important to remember that 66% of the new money in the plan is federal, and my intuition as a former state official is that ultimately the fiscal health of the plan will depend on the state’s ability to strike a new deal with a new administration in Washington, even though waiver approval must also be secured from the current administration to continue the program.

Finally, should comprehensive health reform legislation pass in the Congress in 2009 - a big if - close attention will also need to be paid to how that affects the Massachusetts plan.

Drew E. Altman, Ph.D., President and Chief Executive Officer
Kaiser Family Foundation