The fundamental reasoning underpinning the Affordable Care Act is that having fewer uninsured people will ultimately lower healthcare costs for everyone. After all, those uninsured folks won't be out there racking up medical claims that are eventually covered by everyone with insurance.
It's the same reasoning at the base of the 2006 Massachusetts law that established an individual mandate and since then has lowered the state's total uninsured rate to less than 2 percent, and just over 5 percent for non-elderly adults. That's the lowest of any state and much better than the national rate for non-elderly uninsured of nearly 20 percent.
Each year since 2006, the Blue Cross Blue Shield of Massachusetts Foundation has conducted a study of healthcare costs in the state compared to the United States as a whole. The comparative picture is positive for the grand Massachusetts experiment, not only for uninsured rates but also for quality of care.
In 2012, about two-thirds of respondents to the survey said they were generally satisfied with their coverage for range of services and choice of providers. Nearly three-quarters thought their quality of care was good or excellent, an improvement of more than 10 percentage points since the 2006 law took effect. Access to care was excellent in 2012 with 78 percent reporting they could get an appointment with a primary-care physician as soon as they needed it, and 70 percent said they could get quick appointments with specialists as well.
But this success comes literally at a price.
More than 40 percent of non-elderly respondents reported that healthcare costs had been a problem for their family over the past year, causing problems with meeting the expense (37 percent) or leading them to forego needed treatment (16 percent). Out-of-pocket healthcare spending rose to 5 percent of family income for 22 percent of respondents, and to 10 percent for 8 percent of respondents.
-Even with Massachusetts's best-in-the-nation level of coverage, many people in the state lack adequate financial protection and are burdened by health care costs,the report concludes.
The reason, Employers are now doing the cost-shifting rather than health insurance companies.
-For example, employers may purchase insurance products that have lower premiums but higher out-of-pocket obligations for the insured workers, such as high-deductible plans, the report states.
And since the national health insurance exchanges are based on consumer-driven, high-deductible plans, some of which require thousands of dollars in out-of-pocket spending and deductibles, this is a trend that may plague implementation of the Affordable Care Act over the coming years.
Just half of the respondents to the Massachusetts survey felt that their insurance carrier would shield them from the financial burden of high medical bills and nearly one in five experienced problems paying their medical bills in the past year, unchanged from before the Massachusetts healthcare reform law was enacted. This problem with medical debt didn't just affect the poor. Twenty-two percent of both lower-income adults and the general population reported medical debt.
-Requiring individuals to shoulder a greater portion of the cost of their care may slow the overall growth in health care spending, but in some cases, it may be at the expense of people's health and well-being, the report concludes. Also, there is a limit to how much of the costs can be shifted, as many consumers do not have the financial capacity to continue to shoulder more and more of the cost burden.
Massachusetts has embarked on an attempt to revolutionize payment systems with its 2012 law that ties overall healthcare cost inflation to the increase in state economic growth. It also requires every carrier to offer narrow and tiered networks, and pushes carriers toward global payment contracting which puts providers at risk for keeping costs down.
Watch this experiment closely, because if the Massachusetts 2006 reform bill was the model for Obamacare, payment reform may be coming to a state near you faster than you might imagine.
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