At our annual 4th of July gathering, the topic of healthcare reform came up and I was asked about the state of the Massachusetts health insurance initiative. Since the national healthcare plan is looking a lot like ours - individual mandate, subsidized plans for lower-income families, tax on small businesses who don’t offer insurance (though that one was removed from by Romney) - it seemed like I should dig up some info on that. So here are a few quick facts and links to recent Boston Globe articles on the subject.

Firstly, about 97% of Massachusetts residents now have health insurance. That’s the highest in the nation. Of course, that’s because if you don’t get insurance, you pay a penalty. The amount depends on your income, but I’m pretty sure that everyone who might read this makes more than 300% of the federal poverty level and so we’d all be paying about $900 if we had no insurance for the whole year (tax year 2008).

Second, it’s wound up costing the state a lot of money. We had hoped that the cost of subsidizing insurance for the non-wealthy would be recouped by not having to pay for their emergency room visits. However, a recent survey suggests that use of the emergency room has declined only marginally since 2006. A recent report says that use has actually gone up, but that included only data from 2005-2007 (the law went into effect at the beginning of 2007 and the penalties were not as high then).

There is some suggestion that this might be due in part to long waits to see doctors in Boston. What I don’t entirely understand about this, though, is if the people going to the emergency room have insurance, how is that costing the state money (apart from the state subsidizing their premiums)? I can’t find an answer to that one.

Thirdly, Massachusetts is in a financial pickle, like a lot of other states, I imagine. We have big budget problems across the board. As a result, the state has had to cut $115 million from the organization that subsidizes health insurance, CommonwealthCare. The cuts come from a number of areas, none of them good (eliminating dental for the poorest, not automatically enrolling those eligible for complete subsidy, etc.), but since CommonWealth care is a program for people who can’t already afford health insurance, it’s them that’s going to suffer. I reiterate, however, that this is due to a general budget shortfall. Governor Patrick’s budget had cuts pretty much everywhere. CommonwealthCare may have fared a little worse than some, but the budget cuts do not appear to reflect a systemic problem with the health insurance law.

Lastly, the Massachusetts law doesn’t seem to have done anything about curbing the cost of health care. Here’s a study that says that lots of MA residence spend more than 10% of their income on health care (personally, I left 10% in the dust a while ago). And an article about people struggling to pay copays.

The health care reform was supposed to help a bit with the cost of insurance - by factoring in total out of pocket expenses when calculating the minimum level of insurance that someone must have. But for some reason, costs for prescription drugs are not included.

Bottom line: Almost everyone has insurance. That’s good. Not everyone is using it properly, but that’s due in large part to availability of care. And it hasn’t saved anyone much money. That’s not good, but it’s also not really what the law was for. And any budget shortfall that the Connector Authority (the state agency in question) has is intertwined with a larger shortfall due to the crappy economy.

Bottom line on the bottom line: the only thing we can say for certain is that more people have health insurance. The rest is muddy.