1. Chapter 58: The Basics of Massachusetts Health Reform John E. McDonough, DrPH, MPA Health Care For All (www.hcfa.org) May, 2008

2. Brief History of MA Health Reform: Continuous Policy Improvement Eight Key Statutes: 1985 to 2006 Eight Key Statutes: 1985 to 2006 Three major ones – 1988, 1996, 2006 Three major ones – 1988, 1996, 2006 Continuous Policy Improvement Continuous Policy Improvement Medicaid/MassHealth Expansions, 1988, 1996, 1997 Medicaid/MassHealth Expansions, 1988, 1996, 1997 Uncompensated Care Pool (now Health Safety Net Trust Fund), 1985, 1988, 1997 Uncompensated Care Pool (now Health Safety Net Trust Fund), 1985, 1988, 1997 Small Group Reform/Nongroup Market Reform, 1991, 1996 Small Group Reform/Nongroup Market Reform, 1991, 1996 Patient Bill of Rights, 2000 Patient Bill of Rights, 2000 1988: Universal Health Care Law 1988: Universal Health Care Law $1680 Pay or Play Employer Mandate $1680 Pay or Play Employer Mandate Delayed three times/Repealed 1996 Delayed three times/Repealed 1996 CommonHealth, Student Insurance Mandate, Medical Security Plan, Healthy Start CommonHealth, Student Insurance Mandate, Medical Security Plan, Healthy Start 1996: Chapter 203/MassHealth Waiver 1996: Chapter 203/MassHealth Waiver Medicaid->MassHealth; Enrollee growth from 670,000 (95) to 1,020,000 (01) Medicaid->MassHealth; Enrollee growth from 670,000 (95) to 1,020,000 (01) Uninsurance Drop: 680,000 to 365,000 Uninsurance Drop: 680,000 to 365,000 Coverage for all children – Childrens Medical Security Plan Coverage for all children – Childrens Medical Security Plan Senior Pharmacy Program Senior Pharmacy Program Both reform waves inspired national action Both reform waves inspired national action 1988 Leads to state-based innovations 1988 Leads to state-based innovations 1996 Leads to Creation of SCHIP 1996 Leads to Creation of SCHIP

3. The Power of Incrementalism

4. Chapter 58 (1) – Insurance Connector, Commonwealth Care & Choice Commonwealth Health Insurance Connector Authority – 10 member board Commonwealth Health Insurance Connector Authority – 10 member board Three principal responsibilities -- Three principal responsibilities -- Commonwealth Care (subsidized <300%fpl) Commonwealth Care (subsidized <300%fpl) Subsidized coverage for uninsured with no other options Subsidized coverage for uninsured with no other options No premium <150%fpl; sliding scale 150-300% fpl; Co-pays No premium <150%fpl; sliding scale 150-300% fpl; Co-pays Commonwealth Choice (non-subsidized >300%fpl) Commonwealth Choice (non-subsidized >300%fpl) Private plans for uninsured >300% fpl and small employers Private plans for uninsured >300% fpl and small employers Define affordability for individual mandate and minimum creditable coverage Define affordability for individual mandate and minimum creditable coverage

5. Chapter 58 (2) – MassHealth Expansions and Restorations MassHealth: MassHealth: Kids coverage from 200 to 300% fpl ($63K family of 4) Kids coverage from 200 to 300% fpl ($63K family of 4) MassHealth enrollment caps lifted MassHealth enrollment caps lifted Essential, CommonHealth, HIV Essential, CommonHealth, HIV Optional Benefits Restored: dental, dentures, eyeglasses Optional Benefits Restored: dental, dentures, eyeglasses New smoking cessation and wellness benefits New smoking cessation and wellness benefits $3.5M outreach/enrollment grants $3.5M outreach/enrollment grants $270M ($90M per year) hospitals/physicians rate hikes $270M ($90M per year) hospitals/physicians rate hikes Pay for Performance/R/E Disparities benchmarks Pay for Performance/R/E Disparities benchmarks

6. Chapter 58 (3) – Individual & Employer Responsibility Individual Responsibility Individual Responsibility Beginning 7/1/07, all 18+ must obtain health insurance Beginning 7/1/07, all 18+ must obtain health insurance Penalties if affordable coverage available Penalties if affordable coverage available 2007: loss of personal tax exemption if no coverage by 12/31/07 2007: loss of personal tax exemption if no coverage by 12/31/07 2008: tax penalty= up to $76 per month or $912 per year 2008: tax penalty= up to $76 per month or $912 per year 2009 and Beyond: to be determined 2009 and Beyond: to be determined Employer Responsibility Employer Responsibility Fair Share Employer Contribution Fair Share Employer Contribution Employers (11+ FTE workers) must pay $295 annually per uncovered worker Employers (11+ FTE workers) must pay $295 annually per uncovered worker Employers 11+ must create Section 125 cafeteria plans Employers 11+ must create Section 125 cafeteria plans Free Rider Surcharge Free Rider Surcharge Non-offering Employers (11+ workers) with frequent Uncompensated Care Pool users may be charged up to 55% of costs over $50K Non-offering Employers (11+ workers) with frequent Uncompensated Care Pool users may be charged up to 55% of costs over $50K No charge on non-offering firms with 125 plans No charge on non-offering firms with 125 plans

7. Chapter 58 (4) – Insurance Market Reforms Small/Nongroup Insurance Market Reforms Small/Nongroup Insurance Market Reforms Individual market (60K lives) merged with small group market (750K lives) on 7/1/07 – dramatic premium reductions Individual market (60K lives) merged with small group market (750K lives) on 7/1/07 – dramatic premium reductions Young adults (19-25) can stay on parents plans for two years Young adults (19-25) can stay on parents plans for two years Young Adult Plans for 19-26 year olds Young Adult Plans for 19-26 year olds Other Reforms Other Reforms Quality and Cost Council Quality and Cost Council Sets cost and quality benchmarks; Produces website Sets cost and quality benchmarks; Produces website Racial/Ethnic Health Disparities Council Racial/Ethnic Health Disparities Council Computerized Prescription Order Entry – $5 million Computerized Prescription Order Entry – $5 million

8. How Did It Happen? Key Players Blue Cross Blue Shield Access Foundation Blue Cross Blue Shield Access Foundation Roadmap to Coverage Initiative/Urban Institute Roadmap to Coverage Initiative/Urban Institute Gov. Mitt Romney Gov. Mitt Romney Advocacy Community Advocacy Community Patients/Consumers, Providers, Labor, Business Leaders Patients/Consumers, Providers, Labor, Business Leaders Affordable Care Today Coalition (ACT!) – legislative coalition Affordable Care Today Coalition (ACT!) – legislative coalition Ballot Initiative Committee (MassACT!) – 120,000 citizen signatures Ballot Initiative Committee (MassACT!) – 120,000 citizen signatures Senate President Robert Travaglini + Senate Senate President Robert Travaglini + Senate House Speaker Sal DiMasi + House House Speaker Sal DiMasi + House *** Federal Government – 1115 Medicaid Waiver *** Federal Government – 1115 Medicaid Waiver $385M supplemental payments at risk $385M supplemental payments at risk Breaking the Altman Rule – Status Quo was not an option Breaking the Altman Rule – Status Quo was not an option Business Groups Business Groups

10. Medicare Medicaid Employer Coverage IndividualMandate Medicaid Expansions Employer Responsibility Insurance Market Reforms Affordable Products Young Adult Products Connector Commonwealth Care Developed by Nancy Turnbull, Harvard School of Public Health