Sample Policy Analysis Paper on Massachusetts Healthcare Reform

Abstract

This report critically evaluates Massachusetts healthcare reform. The reform has expanded health insurance coverage but increased healthcare cost impacting negatively on quality of care offered to the people. The policy enacted in 2006 by the state of Massachusetts has met its primary goal of ensuring near-universal health coverage. However, its coverage success has been challenged by scholars who claim that the cost of healthcare is still high in Massachusetts. Additionally, the primary-care physicians are opting out of Medicaid program because of the rigid nature of payment plans, and in the subjecting patients to unnecessary hospital admissions. Nonetheless, the state of Massachusetts needs to manage the rising cost aspect of the policy.

 

Policy Analysis of Massachusetts Healthcare Reform

Introduction

The Massachusetts healthcare reform was enacted to achieve universal health coverage and enhance access to care services. Moreover, the policy seeks to reduce ethnic and racial disparities with regard to access and affordability. Health disparity remains a formidable issue affecting the United States healthcare system. Through the reform, healthcare coverage was expanded to include low income earners primarily drawn from minority ethnic groups. The policy also coined the Health Disparities Council tasked with the responsibility of monitoring and formulating recommendations on the progress made regarding access to healthcare services by the minority communities. The Massachusetts healthcare policy seeks to expand insurance coverage through individual mandate. The mandate requires adults to have healthcare insurance or risk a penalty. Decidedly, the policy extends Medicaid to address the healthcare cost affecting individuals with meager incomes. Furthermore, the policy envisages a health insurance exchange offering subsidized plans to low income earners. The reform has expanded health insurance coverage but increased healthcare cost impacting negatively on quality of care.

Rationale for the Policy

In practice, the Massachusetts healthcare reform’s rationale is to restructure and deregulate the health insurance sector. The policy aims to ensure that people capable of affording health insurance packages remit the premiums or risk imposed penalties. Hence, the existing small or non-group health insurance markets are converted into subsidies to encourage the low-income earners to obtain health insurance. Per Tiffany (2016), the primary objective of the reform is to expand healthcare coverage, enhance greater consumer choice when buying insurance packages, and foster value-focused competition between insurers and service providers. In addition, the policy directly addresses the economic burden of taxpayers through provision of subsidized health insurance packages. Tiffany (2016) further acknowledges that Massachusetts healthcare policy also attempts to organize health insurance marketplaces. The organization is to grant clients the opportunities to evaluate and weigh options and alternatives before buying health insurance plans.

The main component of Massachusetts healthcare policy is the creation of a new statewide health insurance exchange. It is exemplified that the connection created between state and private insurers allows workers and business enterprises with less than fifty employees to purchase personalized and portable health insurance coverage (Frean et al., 2017). The reform in unique based on the conception of organizing insurance markets around a centralized module where people can directly buy insurance plans. It is revealed that the policy has succeeded in an area in which other states failed (Frean et al., 2017). These states have often struggled to expand health coverage to small business with fewer employees and individual workers. The Massachusetts policy is lauded as being bipartisan as it moved away from reform initiatives that failed to make meaningful progress in covering the uninsured population.

Adoption of the Policy

The passage of the Massachusetts healthcare reform bill in April 2006 set a contemporary dawn in healthcare insurance. The law introduced direct participation of people in health insurance decisions. The residents of Massachusetts retained liberty to obtain insurance from the employer, individual or utilized the assistance of the publicly funded program. In addition, the state also improved access to healthcare by expanding the eligibility provision for subsidized public programs. Per Jeffery (2015), Massachusetts provides access to many individuals with incomes of up to 300 percent of federal poverty level (FPL) through broad array of services enshrined in Demonstration Waiver. In the policy, illegal immigrants are only eligible for emergency coverage to address their emergency health needs (Jeffery, 2015). Consequently, legal immigrants who fail to qualify for the federal funding are included as groups under the policy. From the description, the policy addresses the health needs of the entire population in one way or the other.

The adoption of the healthcare reform led to the creation of health insurance exchange program. The program is described by Kaestner (2016) as Commonwealth Health Insurance Connector Authority also known as the Connector. The connector provides users with vital tool and information to enable them spot the different insurance packages available in the market.  The support in selecting insurance plans is meant for people with lower incomes and ineligible for public assistance and unable to access coverage through their employers. Hence, the policy assists them to make the ideal choice with regard to cost and affordability. Furthermore, the policy created the Commonwealth Choice, an avenue utilized by consumers to purchase health coverage plans. Kaestner (2016) reveals that the Commonwealth Choice envisages myriad plans offered by private insurers to enable households and families not privileged to purchase insurance plans. The connector is also an excellent point in which small employers can directly purchase health plans for their employees.

To enhance affordability of healthcare service, the reform includes an affordability clause. The clause is meant to protect individuals without health insurance from being penalized for their inability to purchase insurance plans that they cannot ideally afford. In the policy, the employers also have the responsibility of ensuring all of their employees are enrolled in myriad plans of healthcare insurance. It is revealed that Massachusetts healthcare bill also adopts significant rate increases for specific healthcare providers, hospitals, physicians, and community health facilities (Kaestner, 2016. However, the healthcare providers have argued that state payments often lag behind costs making it difficult to sustain medical services. As such, the policy allows the addition of more individuals to state coverage directly affecting health providers who claim to operate below-cost rates. Nonetheless, the argument does not affect the primary intention of the policy to enroll more people to healthcare insurance.

The Funding Structure

The funding structure is implemented through the employer and individual mandate. Part of the funding comes from surcharging private insurance plans. The healthcare funding is directly paid by business enterprise and workers who purchase insurance coverage. Per Frean et al. (2017) shows that an average of 62 dollars is surcharged per worker, annually. The policy also imposes an equivalent assessment of companies with less than ten workers and does not offer health coverage. The amount of the assessment is pegged on annual calculation of the amount of uncompensated care utilized by the employee working in small enterprises. Based on Frean et al. (2017), the statutory maximum deduction is an average of 295 dollars per employee. The individual mandate is additionally a method used to fund the insurance pool. Per Frean et al. (2017), the individual mandate imposes a penalty of 2.5 percent of the income or 695 dollars per adult, annually. Fundamentally, the Massachusetts health policy subjects the people to inexpensive health insurance plans depending on health needs.

The Impacts of the Reform

Massachusetts has achieved near-universal health insurance coverage. It is reported that the insurance coverage rate has reached as high as 97.5 percent in the states courtesy of employer and individual mandates (Kaestner, 2016). In return, increase in number of people enrolling for healthcare insurance has directly boosted the insurance pool guaranteeing quality health services to the people. It is reported that 2 years after the enactment of the bill, the rate of the uninsured dropped to below 5 percent in Massachusetts (Kaestner, 2016). Wettstein (2018) further reports that by 2008, Massachusetts was the leading state with the highest health insurance coverage in the United States. Massachusetts has been top among states in the subsequent years. Although the state has tremendously improved, uninsured is exceptionally high among the immigrants, minority communities, less-educated and households with incomes less than the federal poverty level. It is shown that the annual premiums have increased by more than 50 percent with employers shifting certain care cost to employees (Wettstein, 2018). It implies the reform has faced challenges in its attempt to guarantee universal care and affordability of healthcare services.

The legislation has failed to curtail the cost of healthcare in Massachusetts. The state is among the most expensive in terms of healthcare cost in the United States. It is reported that health cost is on a constant rise at an unprecedented rate (Shrank et al., 2017). It is surprising that the bill continues to face challenges despite the highly publicized near-universal coverage. Shrank et al. (2017) reports that the legislation has led to the collapse in service provision of primary-care physicians. As a consequence, the expansion of insurance coverage has failed to yield better health services. It implies that funds channeled towards Medicaid are not sufficient to fully operate or support the medical practice. The subsidies imposed by the state are meant to expand Medicaid worsening the cases of primary-care physicians who decide to opt out of the programs. Thus, the reform has made it difficult for a hospital to find a primary-care physician for patients who come to the hospital without one. It is reported that patients are subjected to unnecessary costs because of hospital admissions that could have been prevented if a patient had seen a primary physician first (Shrank et al., 2017). In the long run, the reform has negatively impacted on provision of primary care to patients.

Ethical Outcome of the Reform

The Massachusetts healthcare reform has had to contend with ethical concerns. An ethical issue arises on whether the policies governing group insurance offers the best care to the maximum number of employees. Per Marmor & Sullivan (2015), Massachusetts health reform requires all companies with fifty or more workers to make insurance coverage available to their employees that qualify based on the virtue of employment agreement. Unfortunately, the policy unethically leaves out employees in minor companies to identify their own ways of obtaining insurance coverage from the marketplaces. Consequently, the state of Massachusetts has failed it its ethical responsibility of supporting startups and small companies provide insurance coverage to their employees. Instead, these companies are left on their own to contend with the pressure from the state and other healthcare stakeholders on the need to achieve the near-universal health coverage. Furthermore, Marmor & Sullivan (2015) outlines that the reform raises an ethical issue with regard to the extent to which employers avail insurance when the state of Massachusetts provides little coverage. Therefore, employers intentionally shift certain healthcare costs to the individual workers. It is unethical for employers to shift cost to consumer because the state government is providing less funds to Medicaid programs.

Conclusion

The United States foster a culture of merging efforts of federal, state governments and private employers in an attempt to provide healthcare services. Although the quality of care offered by different states is largely unchallenged, ethical issues have risen regarding how best the program serves maximum number of people. The policy enacted in 2006 by the state of Massachusetts has met its primary goal of ensuring near-universal health coverage. However, its coverage success has been challenged by scholars who claim that the cost of healthcare is still high in Massachusetts. Additionally, the primary-care physicians are opting out of Medicaid program subjecting patients to unnecessary hospital admissions. Nonetheless, the state of Massachusetts needs to contain the rising cost of healthcare because reform is unsustainable without cost restraint.

 

References

Frean, M., Gruber, J. & Sommers, B. (2017). Premium subsidies, the mandate, and Medicaid expansion: Coverage effects of the Affordable Care Act. Journal of Health Economics, 53, 72–86.

Jeffery, C. (2015). Regulatory redistribution in the market for health insurance. American Economic Journal: Applied Economics, 7(2), 109-134.

Kaestner, R. (2016). Did Massachusetts health care reform lower mortality? No according to randomization inference. Statistics and Public Policy, 3(1), 1-6.

Marmor, T. & Sullivan, K. (2015). Medicare at 50: why Medicare-for-all did not take place. Yale J Health Policy Law Ethics, 15(1), 141-183.

Shrank, W., Saunders, R. & McClellan, M. (2017). Better evidence to guide payment reforms: Recognizing the importance of perspective. JAMA, 317(8), 805-806.

Tiffany, J. (2016). What health care reform means for immigrants: Comparing the Affordable Care Act and Massachusetts Health Reforms. J Health Polit Policy Law, 41(1), 101–116.

Wettstein, G. (2018). The Affordable Care Act’s Insurance market regulations’ effect on coverage. Health Economics, 27(3), 454–464.