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September 2008

Massachusetts Sees 439,000 Newly Insured Residents During the Past 21 Months

State officials announced on August 19 that more than 439,000 people have acquired health insurance since the Massachusetts health expansion plan began in mid–2006. That number is two-thirds of the estimated 650,000 people who were without insurance at the time of the plan’s inception. These findings are included in the August publication of the Division of Health Care Finance and Policy’s report, Health Care in Massachusetts: Key Indicators. This quarterly report provides an overview of the Massachusetts health care landscape through data reported by providers, health plans, and government, and through surveys of Massachusetts residents and employers. The report also found that more than 40 percent of the newly insured are covered with private plans, while the rest are insured with Medicaid or state-subsidized plans. More specifically, the report found that between June 30, 2006 and March 31, 2008:

  • 159,000 people became covered through employer sponsored insurance,
  • 32,000 through individual (i.e., non-group) plans,
  • 72,000 through Medicaid, and
  • 176,000 through enrollment in state-subsidized Commonwealth Care health plans. 

With the most recent state figure for the rate of uninsured at 5.7 percent of the state’s population, Massachusetts now has the lowest rate in the nation. Among the state’s insured population, 82 percent have private insurance, 14 percent are covered by Medicaid, and 3 percent are enrolled in Commonwealth Care plans.

As most of those who follow state health insurance trends are likely aware, key components of the plan include an expanded Medicaid program, establishment of subsidized health plans, a mandate that nearly all residents acquire and maintain health insurance or suffer a tax penalty, and a requirement that employers with 11 or more full time equivalent employees provide a minimum amount of health insurance or pay a penalty of $295 per worker per year.

Largely as a result of increased coverage, there has been a corresponding drop in the cost of uncompensated care at hospital emergency rooms and community health centers. The cost of this uncompensated care decreased from $166 million in the first quarter of fiscal year 2007 to $98 million in the first quarter of 2008. This considerable drop over a relatively short period of time can mainly be attributed to significantly more people having enrolled in insurance more quickly than was predicted. Accordingly, the first-year cost of Commonwealth Care has grown from an expected $472 million to $630 million. 

Although the program to date is fully financed and the cost per individual has been less than anticipated, the unexpected success of enrollment requires funding adjustments. Governor Deval Patrick has a plan to make up the rest of the difference by increasing contributions from businesses, insurers and providers; instituting a tobacco tax (amounting to an increase of $1.00 per pack of 20 and $1.25 per pack of 25); and attempting to obtain increased funding through a renewed Medicaid waiver. Furthermore, in an effort to prevent crowd-out, premiums in the Commonwealth Care program have been raised by 10 percent, with an additional increase in co-payments for some beneficiaries, to make the plan more in line with private plans.