With Massachusetts health insurance rate at 94.2 percent, focus shifts to cost
BOSTON - A report published last month in the journal Health Affairs showed that 94.2 percent of the non-elderly population in Massachusetts had health insurance, a significant increase from the 86.6 percent who were insured prior to the state's health reforms.
“Just as Massachusetts's 2006 health reform legislation provided the template for the Affordable Care Act...the state's experience under that legislation provides an example of the potential gains under federal health reform,” said report authors Sharon K. Long, Karen Stockley and Heather Dahlen.
But the report “Massachusetts Health Reforms: Uninsurance Remains Low, Self-Reported Health Status Improves As State Prepares To Tackle Costs” had both good news and bad news. While respondents to a 2010 survey self-reported improvement in their health status, the cost of insurance continued to skyrocket, because legislators deliberately chose to put off addressing the rising costs of care when it wrote the 2006 law.
The out-of-pocket costs to employees of health insurance premiums increased between 2006 and 2010 from $1,011 to $1,200 for single coverage and $3,128 to $3,444 for family coverage.
With the number of Massachusetts residents now covered by insurance at an all time high, it appears the state is now ready to tackle the rising costs of care and insurance in the state. In January, the state approved small group rate increases from insurance companies that averaged only 2.3 percent. Governor Deval Patrick said this low increase is proof positive the state is beginning to make inroads on controlling costs.
“We all know it consumes too much of family, small business and government budgets. Our businesses, employees, families, governments - all of us combined - spend $66 billion on healthcare in Massachusetts every year. And that spending doubled in the last decade and, without intervention, will double again in the next ten years,” Patrick said in his State of the Commonwealth address in January.
“So, starting two years ago, we intervened. And it's helping,” he continued. “Average premium increases were 16.3 percent two years ago. Today, they are 2.3 percent.”
Yet some in the insurance industry worry that keeping a lid on rates may not be sustainable and that as the economy improves, so will healthcare utilization, which, in turn, will drive up costs for health plans.
Andreana Shanley, senior vice president and chief actuary of Blue Cross Blue Shield of Massachusetts, the state's largest health insurer told the Boston Globe recently: “We are susceptible as an industry and a society to the ups and downs of the economy.”
While this year's small increases in the small group market weren't dictated by the state, insurance executives indicated they felt compelled to rein in their rates this year due to pressure from both the state and consumers.
As a result, insurers have been aggressively pushing forward new payment models intended to keep a lid on rising costs. Among these plans are a Tufts Health Plan and Partners HealthCare renegotiated commercial contract that could save members as much as $105 million starting this year, and Blue Cross Blue Shield of Massachusetts' continuing effort to sign providers to its Alternative Quality Contract, a modified global payment model that the company says will hold cost increase to the rate of inflation or lower.