Yesterday was an important day for health care reform in Massachusetts. On the first birthday of our historic health reform law, the Board of the Commonwealth Health Insurance Connector Authority (which I am privileged to Chair) unanimously approved a draft proposal to implement one of the centerpieces of our efforts to expand health insurance coverage: the “individual mandate” requiring all adults who can afford health insurance to have it. If you view health care reform as having three legs – employer responsibility, government responsibility, and individual responsibility – our vote was about putting that third leg in place. In doing so, the Board has set the stage for covering virtually everyone in the Commonwealth with health insurance that meets the highest standard in the nation.
Specifically, the Board adopted affordability standards that require virtually all adults in Massachusetts to have health insurance coverage, and took important steps to help them meet this new requirement. For example, in combination with requiring uninsured people who are eligible for subsidized health insurance through the Connector’s Commonwealth Care program to sign up, we lowered some of the program’s premiums to make them more affordable. As a result of these changes, there will soon be no premiums required for those who have incomes up to 150 percent of the federal poverty level (this was formerly the case only for those with incomes below 100 percent of the poverty level). We also voted to reduce premiums from $40 to $35 per month for those with incomes between 150 and 200 percent of the poverty level.
To complement these decisions, Governor Patrick decided to waive the premium payments for children in the State Children’s Health Insurance Program when they have parents paying premiums for Commonwealth Care coverage. This decision reflects the Governor’s deep commitment to improving access to quality, affordable health care and his continuing efforts to help health care reform achieve its immense promise. It will make health care more affordable for thousands of families, saving a family with three or more children as much as $84 per month in premiums. Secretary of Health and Human Services Judy Bigby played a critical role in advocating for this change and making it happen at this crucial time.
The affordability schedule adopted by the Connector also provides guidance to those at all income levels whose employers contribute to their insurance, as well as people who have incomes greater than three times the poverty level but don’t have employer-sponsored insurance. The schedule is ambitious, bringing into the ranks of the insured significant numbers of younger adults (among others). By purchasing health insurance, these individuals will secure better health care and financial protection in the event they get sick – the core purposes of this entire effort to expand coverage. Moreover, when they get covered, health insurance becomes more affordable for everyone else.
Our affordability schedule is also fair and humane. It recognizes that, at least initially, those at the very lowest income levels will largely not be able to afford health insurance unless they have access to significant subsidies, and that even at higher income levels, older people may have trouble paying for health insurance at current prices. It also recognizes that a schedule can only go so far in anticipating and addressing the reality of peoples’ lives and challenges. Thus, an individual waiver process will help provide protection to those facing particular circumstances that leave them facing financial hardship. We will also work to encourage employers to adopt Section 125 plans – which treat payments for health insurance as pre-tax income and, thus, can very significantly lower the actual costs of premiums for workers.
Wrestling with the issue of “affordability” and how to implement health care reform’s “individual mandate” is like walking a tightrope. On the one side, leaving too many people outside the individual mandate would leave too many people without health insurance – defeating the whole purpose of health care reform and, most importantly, hurting those very people by consigning them to sporadic care and no financial protection in the event a serious health issue came up. It would also frustrate the hope of making health care insurance more affordable for all through greater participation by younger, healthy people. On the other side, reaching too far in penalizing people for not having health insurance would ignore the fact that, for some, the cost of health insurance today does remain outside financial reach.
The approach adopted by the Board was an attempt to walk that tightrope successfully, and I am hopeful that we have succeeded. I believe this approach fulfills the core mission of health care reform to dramatically expand health insurance coverage, while at the same building in protections and flexibility throughout the process to avoid creating financial hardship for individuals who truly cannot afford health insurance. It makes targeted, appropriate investments in making health care more affordable without imposing substantial new costs on the state. It is our intent and hope that this process will be possible to administer, and with public outreach and education, capable of being understood. Of course, these are only draft proposals right now. They will be the subject of public hearings in May, and I know that the Connector Board and staff are very much looking forward to receiving input from consumers, businesses and others who will be affected by the decisions we make.
With success here, we will be at the gates of truly universal coverage and well-poised to get there. Bringing young people into the ranks of the insured; encouraging a “culture of insurance”; learning from the practical experience of actually implementing an “individual mandate” and offering new subsidized programs; and pursuing other initiatives to control health care costs both inside and outside the four corners of health care reform – all of these things will allow us to take the final step to ensuring coverage for absolutely everyone. No doubt, we face many challenges ahead, in continuing an ongoing process of translating the law and the Connector Board’s decisions into concrete actions that affect the lives of people throughout the Commonwealth. But I believe that we have taken a major step forward in creating a framework for ultimate success.
This latest milestone for health care reform is a product of collaboration and compromise. The approach adopted by the Board draws from the best thinking of numerous individuals and groups that are so deeply committed to the success of health care reform that they have spent countless hours working on this issue and helping relative newcomers like me get my bearings. In particular, Jon Kingsdale and his tremendous staff at the Connector continue to be both smart thinkers and good listeners. They have worked tirelessly to develop an effective and humane approach to implementing the “individual mandate,” all the while working feverishly to get people signed up for Commonwealth Care and get the Commonwealth Choice program up and running. My colleagues on the Board shaped this proposal by asking the right questions and contributing creative solutions to difficult challenges. Stakeholders, experts and advocates from diverse perspectives vigorously advanced their own proposals, but were also willing to consider other ideas and were open to compromise. Governor Patrick was not only instrumental at other stages of health care reform (such as during the bidding process for Commonwealth Choice plans) but also steered the Administration’s approach to this critical issue of affordability. And I know that we are all grateful for the continuing guidance and support of members of the Legislature, especially Speaker DiMasi and Senate President Murray.
The fact that the Board’s vote was unanimous and enjoyed support throughout the wide community that cares about health care reform is important well beyond yesterday. With everyone on board, we will be able to go out as a team and do the hard work needed to put health care reform fully into action – to educate people about both new requirements and new opportunities for affordable insurance; to help workers and employers understand the benefits of Section 125 plans; to observe the impacts of the new law; and to work together to overcome the inevitable challenges and obstacles to success.
So, happy birthday health care reform. It’s been a great year. Wishing you many more. And feeling optimistic that you’ll have them.
Leslie Kirwan is Secretary of Administration and Finance for Governor Deval Patrick and chairs the Connector Board
This program aired on April 13, 2007. The audio for this program is not available.