Benefits

Health Care Official Says Costs of Covering Uninsured in Massachusetts Exaggerated

By Staff Report

Aug. 27, 2009


The cost to Massachusetts of its pioneering 2006 law that has moved the state close to universal health insurance coverage is much lower than critics maintain, says a top state official.


In a column released Wednesday, August 26, Jon Kingsdale, the executive director of the Massachusetts Health Connector, which administers programs to the uninsured, says critics have exaggerated the costs of expanding coverage.


While critics have pegged the cost of Commonwealth Care, the program that provides subsidized health insurance premiums for low-income uninsured residents, at $1.3 billion in fiscal 2009, the actual cost was about $800 million, about 10 percent higher than projections made when the legislation was passed, Kingsdale wrote.


The chief reason for increased spending was that enrollment in the program was higher than expected because initial estimates of the number of uninsured proved low.


“The Connector enrolled the larger pool of eligible uninsured individuals faster than anticipated. As a result, costs grew in concert with the rapid enrollment, not because of medical inflation,” Kingsdale wrote.


Between 2006 and 2009, premiums per enrollee in Commonwealth Care increased on average by just less than 5 percent, a slightly lower rise than increases experienced by group health care plans nationally during the same period.


Other “myths” recently circulating about the Massachusetts law, Kingsdale wrote, include that the number of uninsured in the state remains high and that the only expansion of coverage has been through free state insurance programs.


In fact, 97.4 percent of Massachusetts residents now have coverage, the highest percentage of any state, and much higher than the national average of about 85 percent, Kingsdale wrote. In addition, Kingsdale said, of the 428,000 newly insured, 190,000 are enrolled in employer plans, the first significant increase in employment-based coverage in decades.


In addition, the law, contrary to assertions of critics, has not led to a proliferation of new individual benefit mandates, Kingsdale wrote. Included in the 2006 law was a temporary moratorium on new mandates, though it left intact mandates enacted previously.



Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


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