As Massachusetts continues to press toward fulfilling its new law for nearly universal coverage, a recent study shows that cost is still a major concern for individuals and small businesses.
The study, released July 26 by the Center for Studying Health System Change (HSC), was based on interviews with about 25 market observers in 2007. Those interviewed included employer groups, state agencies, health plans, providers, advocates and other healthcare leaders knowledgeable about the reform, HSC said
Paul B. Ginsburg, president of HSC, said that even though individual and small-group health insurance markets have made reforms - including the development of new insurance products - there are still concerns about the affordability and rising cost of healthcare.
According to Massachusetts' reform law, all employers with more than 10 workers must establish cafeteria plans to allow workers to purchase insurance with pre-tax dollars. They must also pay a $295 annual fee if they do not make a "fair and reasonable" contribution to the cost of workers' coverage.
The Massachusetts healthcare reform plan, signed into law April 12, 2006, requires most of the state's uninsured adult residents to purchase health insurance coverage. Nearly 300,000 adults, or 9 percent of the adult population, were uninsured at the time of the signing. The study notes that nearly three-quarters of the uninsured in Massachusetts are employed, and most work more than 35 hours a week for small firms.
The study found that many small firms may be unaware of the law's specific requirements and might be surprised by the difficulty they pose. The largest impact on small employers is expected to come from the mandate that all Massachusetts residents have health insurance, the study said.
"Workers who now decline coverage offered by their employers may choose to participate because of the individual mandate, raising costs for employers," said Laurie Felland, HSC researcher and study co-author.
In addition, since state residents will face tax penalties for going without health insurance, the study found that employers that do not offer coverage might become less attractive to workers.
Most market observers who participated in the study said affordability will be the ultimate factor to determine the success of Massachusetts' healthcare reform.