"A First Look at 'Shared Responsibility'" by Robert Seifert and Paul Swoboda

The Massachusetts health care reform law was enacted 3 years ago this month. Much credit for the law’s passage was given to the balance struck among various interests, and to the concept of “shared responsibility” for financing the expansion of health insurance coverage. Since April of 2006, over 400,000 more people in Massachusetts have health insurance, but there has not yet been a full assessment of whether the goal of shared responsibility is being realized.

Our analysis, being released today by the Blue Cross Blue Shield of Massachusetts Foundation, suggests that it is, at least at this early stage of reform. We took a comprehensive look at who was paying the premiums and other costs of private and public health insurance among employers, consumers, and government in 2005, the year before the law, and in 2007, the first full year after. We also looked at the distribution of spending on uncovered services, since an explicit goal of reform was to see these payments reduced as coverage increased.

Overall, we found that the shares of spending on coverage and uncovered services remained essentially the same between 2005 and 2007: employers and union health plans accounted for about 45 or 46 percent of total spending, government contributed about 30 percent, and individuals the remaining one-quarter. Embedded in these overall findings were some interesting dynamics.

For example, the government’s share of spending on coverage increased slightly faster than the other two sectors’, mainly because of the introduction of Commonwealth Care. This was offset, however, by the rapid decline in spending for uncovered services the government had been making through the Uncompensated Care Pool (now the Health Safety Net) and supplemental payments to hospitals. This shift, of course, was an important goal of the reform law.

We consider this analysis of shared responsibility in the first full year of reform to be a baseline. The overall picture bears monitoring as reform continues to unfold and as policy makers focus on sustaining and expanding initial coverage gains, while taking on the challenge of controlling the increasing cost of that coverage.

Robert Seifert and Paul Swoboda are Senior Associates at the Center for Health Law and Economics, University of Massachusetts Medical School