Massachusetts begins health-care experiment

BOSTON — There is a lot of talk about overhauling health care in the U.S., but Massachusetts is trying to do it — again.

Today, the home of some of the nation's most prestigious hospitals and medical schools becomes the first state to require its 6.5 million residents to have health insurance or face financial penalties.

Making insurance mandatory — and more affordable — is the centerpiece of a law approved by the Legislature last year that civic and business leaders hope will substantially reduce the ranks of the state's 400,000 uninsured and the number of people who seek costly "uncompensated" care in hospital emergency rooms.

Nearly 20 years ago, Gov. Michael Dukakis signed universal-health-care legislation that was supposed to bring coverage to everyone by 1992. But the law's requirement that employers provide coverage to workers or pay a tax proved unpopular, and it was never implemented.

Could become a model

Massachusetts's new experiment could become a model for major changes in health care across the country — if it works.

Democratic presidential candidates are borrowing some elements for their campaign platforms, Republican Gov. Arnold Schwarzenegger is pushing a similar plan in California and other states are watching.

The Massachusetts law divides the population into three segments:

• The poorest, making less than the federal poverty level, are eligible for free care.

• People making slightly more, up to three times the federal poverty level, can enroll in state-subsidized plans.

• Those making more than three times the federal poverty level — at least $30,630 for an individual and $61,950 for a family of four — can choose their own coverage from new, lower-cost private plans, if they aren't insured through work.

The state's place in the national spotlight is not lost on the Massachusetts officials, business leaders and consumer advocates who forged an unlikely alliance to get the law passed in April. They know that would-be reformers around the country are hoping they will succeed and that skeptics were quick to cluck over reports that the new state-facilitated insurance plans might be unaffordable for average citizens.

"They might like to imitate us, some of them, but a lot of them can't wait for us to fail," said Jon Kingsdale, executive director of the Commonwealth Health Insurance Connector Authority, the entity implementing the law.

Although today marks the beginning of the "individual mandate" — the legal obligation to obtain health insurance — the real deadline is Dec. 31.

When Massachusetts residents file state tax returns next spring, they must certify they had acceptable coverage as of the end of 2007, or lose the $219 personal exemption. The penalty grows steeper in subsequent years, big enough, officials hope, to persuade most holdouts to get coverage.

The state's 175,000 employers have to pitch in, too. Businesses with 11 or more full-time employees that do not offer health insurance must pay an annual "fair-share" assessment of $295 per employee. And businesses must arrange to allow workers to pay health-insurance premiums with pre-tax dollars.

Subsidized plans

So far, the state has enrolled about 130,000 formerly uninsured people in health-care plans, virtually all in the free or subsidized plans.

The far more challenging task is persuading the estimated 160,000 still uninsured residents not eligible for subsidized plans to pay monthly premiums for health plans offered by private insurers through the Connector under the Commonwealth Choice program. Even the lower-cost plans can run several hundred dollars a month.

Premiums go up with age, but people cannot be charged more if they are sick or denied coverage because of a pre-existing condition.

Costs are still too high for some. Already, state officials expect to exempt 60,000 residents from the new mandate because they cannot afford the insurance at the going rates, even though they earn too much to qualify for subsidies.

That is a big reason Massachusetts is destined to fall short of universal coverage under the new law, officials said, although proponents said that covering 99 percent of residents is still possible.

The state's costs are a concern, with some analysts wondering whether Massachusetts will be able to keep funding the $1.6 billion-a-year program if the economy slumps.

"This is not an enterprise for the faint of heart," said John McDonough, executive director of Health Care for All, a nonprofit group that pushed for the new law. "There are always risks. There are always problems. ... Get used to it."

Associated Press material is included in this report.