Officials involved in the creation and implementation of the bipartisan Massachusetts health care law say that the slow start to the roll-out of Obamacare, which is based on the Massachusetts plan, is to be expected: a slow ramp up, shopping around by people comparing programs, increased competition among plans, lowered prices, and eventually wide participation.
Speaking to reporters by phone ahead of President Obama’s visit to Boston, where he delivered remarks from Faneuil Hall, the place where Massachusetts Governor Mitt Romney was joined by Senator Ted Kennedy and other supporters as the Governor signed the state’s health care reform law, they said that the state’s experience during its first year of enrollment offers important lessons for what we can expect over the next six months.
David Simas, Assistant to the President and Deputy Senior Advisor for Communications and Strategy, highlighted “the bipartisan nature of the Massachusetts experience. Republicans and Democrats came together to not only push through the bill, but after the bill was signed and enacted into law, everyone came together to make sure health care in Massachusetts worked – nonprofits, for profits, every level of state government, Democrats and Republicans acknowledged this was the law and was in everyone’s interest to put their differences aside and make health care better for Massachusetts.”
He noted, “The Massachusetts experience really does serve as the blueprint for ACA [the Affordable Care Act, often known as Obamacare], with tremendous similarities – even when you think of the arc of enrollment in Massachusetts, from February to December Dec 2007, you will hear that 123 consumers were signed in first month, that’s just 0.3% of enrollment, with 20% coming in the final month. It is a very good lesson in terms of what we know about this type of reform.”
Simas added, “the final thing, is the core reason for ACA”: that one in three people were denied insurance because of preexisting conditions, and one in two people were left at the whim of higher premiums; that women were charged twice what men were charged, seniors were charged excessive premiums, and people were subjected to annual and lifetime limits.
“This was the experience prior to ACA. Little by little, step by step as we move forward with implementation those days are passed. For first time, there is a market where folks who buy on their own or the 40-plus million uninsured can go to one place, find out if they qualify for financial assistance, compare plans side by side based on price and quality. So, the insurance model shifted from being predicated on denying people who are sick, to taking in people based on price and quality.”
Jonathan Gruber, Professor of Economics, Massachusetts Institute of Technology, who served as advisor to Romney and to Obama in developing ACA, pointed to the success of the plan in Massachusetts and why it bodes well for ACA.
First, he said, is to consider the impact of health insurance reform on the private sector.
“It bothers that ACA is seen as socialized or a takeover. We had dire predictions of what this would do to private insurance in Massachusetts; in fact, in Massachusetts, the private insurance market rose by 10% after the law, and individually available insurance became much more affordable, prices fell by double digits, and there was increased competition, with the first new insurance entrant in decades. So the notion that this is bad or antithetical to private insurance is wrong.”
Gruber noted, “this law ramped up slowly in Massachusetts.. In Massachusetts, a number of people could sign up for free and be automatically enrolled; a number had to pay and these people signed up slowly. In the first month, 123 people signed up; by the end of year, 36,000 had signed up, so it took awhile but as it came closer to the mandate date, increased. The relevant mandate deadline for ACA is next March, so the notion that people are not signed up now for Jan. 1 or March is not important. It will ramp up over time.
“The success of health care reform has to be measured in years, not weeks… We didn’t freak out about daily movements and recognized it would ramp up slowly and it did, but it ramped up to success… We have to be patient.”
Jon Kingsdale, Managing Director of Wakely Consulting Group and founding Executive Director of the Massachusetts Health Connector, said, “We started off with six or seven health plans competing in Massachusetts when reform happened. Connector now offers 10 fully licensed companies competing without any underwriting – it has become an extremely competitive market.
“Insurance is a tough sale – nobody goes down to a broker on a Saturday morning to smell leather and take it for test drive -it is a grudge buy. There will be a lot of searching. We got 100 hits on the website for every one who bought. People browse, look at prices; only 1 out of 18 actually bought. It’s a long process – people want to talk to somebody before making a decision.”
Kingsdale also took on the “myths” about the Massachusetts experience with health reform. For example, that the health reform brings about a shortage of doctors is one.
“Look at the actual care people receive. We are fortunate to have outside agencies (outside the state, private foundations), do research on patients and they found consistently comparing 2006 (before health reform) and 2009 (after), that the regular source of care went up; those who said they had financial barrier to getting health care went down 30%, dental visits went up; 71% said they had preventive care visit year before and after 78%. People got more care they needed with insurance.
Simas pointed to the experience after Medicare Part D, the prescription drug program, was passed under George W. Bush, over objections by many Democrats.
“You reach a point after the law has been passed, and upheld by US Supreme Court where both parties come together and say ‘What can we do to make the law work best and work best for people?’ Medicare Part D had challenges. Democrats worked with folks to make sure everyone knew what their benefits were and how to sign up for them.
“Romney and Ted Kennedy partnered on this. It combined the ideal that Kennedy had all those years of making sure everyone was covered, with a very conservative Heritage Foundation-driven idea to make private health insurance available” as the vehicle for providing health care, rather than using the Medicare (single payer) model which does not use private health insurers as the intermediary.
Simas also addressed the latest controversy of people being notified that they are being cancelled from their individual policies, which seems to contradict what President Obama had promised, that anyone with insurance would be able to keep it.
“Let’s be clear about what we’re talking about and what we are not: Most people are not on the individual market. 85% of people get from their employer, VA, Medicare or Medicaid; 5% buy on their own.
As Simas explained, “Among those folks, if they have a plan when the law was passed, are grandfathered in, unless they clearly left the plan and the plans they enter into have to have the minimum benefit, or if the insurance companies themselves change the plan in a significant way, then they are subject to the minimum benefits of consumer protections of ACA. So context is important.
“The President was clear from the beginning, in 2009 and 2010 – that when talking about people being denied, women being charged more, getting rid of lifetime and annual caps – none of those things applied in the large group market, not at work, VA, Medicare or Medicaid The law had grandfather provisions but when those insurers made changes, they needed to provide the minimum level of protections for everyone going forward.
“The law has a grandfather provision, that if they left the plan, when came back into individual market, the new plans would be subject to minimum benefits and consumer protections, and the same for insurance companies that decide on their own to change benefits, are subject to new benefits and protections.”
Addressing the glitches to the healthcare.gov website, Kingsdale said, “Our program was so much simpler than the challenge faced by the states and federal program, because we used the existing eligibility determinations in one state with hundreds of thousands of people, rather than three-quarters of the country. We spent less than $1 million on website, a small build compared to ACA. The technological challenge in Massachusetts in 2007 was miniscule compared to building the federally facilitated marketplace or some of the state ones.”
“This is a marathon not a sprint,” Kingsdale said.
“There are a lot of differences across the states. Some states are fighting it, committing political malpractice in not expanding Medicaid. But I believe enough in the laboratories of democracy in America. The fact that health reform will do well in some states will put pressure on others. Success needs to be measured after a phase in – three years. Part of that will be the pressure citizens put on their governors who question why other states are doing well.”
The Massachusetts law, passed in 2006, requires most citizens over 18 to have health insurance and in 2012, around 99 percent of Massachusetts residents had some kind of coverage.
Karen Rubin, Long Island Populist Examiner
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