State Strategies (20% of grade)
The purpose of this assignment is to familiarize students with health reform strategies adopted by states. Students will select a state health policy reform innovation and describe the rationale, how it was adopted (e.g., federal waivers, passage by state legislature), the funding structure, and (to the extent statistical data are available) its impact. Students should summarize their findings in a 1-2 page, single-spaced memo.
Sample memo attached. A memo is required, see attached sample.
A few examples of state innovations include Vermont’s single payer system, Massachusetts’ health reforms and Kentucky’s Medicaid healthcare program (none of these can be used).
Rationale
Massachusetts State is among the states that have made a number of attempts aimed at reforming the state’s healthcare system to make access to quality healthcare available for its residents. Recently in 2006, Massachusetts passed the Healthcare Reform Act, which was later, signed into law by former Governor Mitt Romney (Van der Wees et al., 2013). The rationale for this healthcare reform was to provide near-universal health insurance coverage for Massachusetts’ residents.
Adoption of the Reform
The Massachusetts Healthcare Reform Act was passed by the State legislators after years of negotiation between Mitt Romney and the legislators with a compromise reached in 2006 resulting in the enactment of the reform that was effectively signed into law by Romney on 12 April 206. The reform has made several changes to its healthcare system in a move aimed at achieving a near-universal healthcare coverage for the residents of the state. The first change was made to the state’s Medicaid program that was broadened by providing a MassHealth waiver, extending health insurance coverage to children in low-income families with up to 300% of the federal poverty level (FPL) (Kaiser Family Foundation, 2012). Massachusetts created what is called Commonwealth Care, which provides the residents of the state with access to subsidized health insurance for eligible individuals with earnings below 300% of FPL. Under this new healthcare reform, individuals with income below 150% of FPL also have the option of selecting a plan without a monthly premium and low-cost sharing. However, eligible individuals with earnings falling between 150-300% PL are subsidized by the state using a sliding scale.
The Massachusetts Healthcare Reform Act also saw the state expand its Insurance Partnership Program by providing incentives and subsidies to the employers to give and workers to enroll in the state’s employer-sponsored insurance. In this respect, Massachusetts State subsidized insurance costs for the workers in the state who would otherwise be eligible for programs subsidized by the government. However, small businesses are only eligible for up to $1,000 in support per qualified worker who falls below the 300% FPL (Van der Wees et al., 2013). Under the program, the state government pays the portion of qualified workers’ premiums that is equal to what the employees would be expected to pay if employees were on a subsidized plan. Additionally, under this new healthcare reform, any employer in the state who fails to provide health insurance to its workers is expected to pay what is called a ‘fair share’ assessment to the government of up to $295 per worker every year (Kaiser Family Foundation, 2012).
The reform also created what is called the Commonwealth Health Insurance Connector whose primary aim is to link those without access to employer-sponsored insurance and companies with 50 or fewer employees that provide insurance coverage for its workers. According to this health reform, small businesses with 50 of fewer employees have the option of buying insurance coverage on their own or via the Connector (Rapoza, 2012).
Funding Structure
Although Romney and the state legislators agreed on most of the components of the bill, agreeing on how this healthcare reform would be financed was a major issue as it was clear that financing the reform would result in an increase in healthcare cost. However, following a compromise that was reached, the state legislators agreed that the reform would be financed by individuals, employers and the government. First, the Massachusetts Healthcare Reform is funded by the existing $320 million obtained in hospital assessments and covered levies (Van der Wees et al., 2013). Second, the Massachusetts state legislators agreed that the health reform would also be financed through by federal safety-net payments of $610 million as well as federal matching payments on the MassHealth expansion. Additionally, part of the money to be used in financing the health care reform is to come from rate increases projected at $299 million. Further, $295 fair assessment for employers per employee and the Free Rider Surcharge also generates revenue used to finance the ambitious health care reform in Massachusetts (Kaiser Family Foundation, 2012).
Impacts
The impacts of this Massachusetts Healthcare Reform Act have been so profound. The first major achievement of this healthcare reform is that it has increased access to affordable coverage to residents of Massachusetts. Because the law requires all residents of Massachusetts to have a health insurance or pay a fine, the law had seen more that 99% of the residents of the state now get health insurance coverage up from 90% before this healthcare reform was introduced. According to Rapoza (2012), prior to 2006, more than 24% of low-income residents of Massachusetts had no health insurance. However, by 2012, only 8% of low-income adults in the state were still without healthcare coverage. Overall, about 650,000 Massachusetts residents who lacked health insurance are now covered.
Another significant achievement of the Massachusetts health insurance is that it has increased insurance status of higher income persons for the self-employed who did not qualify for MassHealth. According to Urban Institute, the population of higher income earners who were without health insurance before 2006 has dropped from 5% then to below 1% three years after the reform (Kaiser Family Foundation, 2012).
The only notable shortcoming of this healthcare reform is the cost burden associated with its implementation. The health cost in the state has risen to a historic high following the introduction of this healthcare reform was introduced. By 2007, just one year after the reform, Massachusetts healthcare expenditure accounted for about 15.2% of its GDP, which is higher than the nation’s average of 13.7% as a whole (Kaiser Family Foundation, 2012).
References
Kaiser Family Foundation. (2012). Massachusetts health care reform: Six years later. Retrieved from https://kaiserfamilyfoundation.files.wordpress.com/2013/01/8311.pdf
Rapoza, K. (2012, Jan. 20). If ObamaCare is so bad, how does RomneyCare survive? Forbes p. 1 https://www.forbes.com/sites/kenrapoza/2012/01/20/romney-care-massachusetts-healthcare-reform/#3d6701195b00
Van der Wees, P. J., Zaslavsky, A. M., & Ayanian, J. Z. (2013). Improvements in health status after Massachusetts health care reform. The Milbank Quarterly, 91(4), 663–689.
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