5 percent of Mass. taxpayers uninsured, some fined

Nearly 100,000 Massachusetts taxpayers have been fined for failing to obtain health insurance, even as a major survey concludes the effort to create near-universal coverage in the state is meeting key goals.

Five percent of taxpayers failed to obtain health coverage last year, and more than half of those - about 97,000 - were forced to forfeit their personal exemption - worth $219 - after it was determined they could have afforded health care.

Two percent of taxpayers - about 62,000 - were found not to earn enough for health care, avoiding fines. Under the landmark law, taxpayers must show they are insured or face penalties. The numbers were based on a review of 86 percent of expected tax filers for 2007.

The state's first-in-the-nation universal health insurance law required everyone in the state to be insured by July 2007, except for those who secured a waiver proving they couldn't afford insurance.

Gov. Deval Patrick said the fact that 95 percent of filers were insured shows the 2006 law is making progress.

"We continue to put one foot in front of the other," Patrick said Monday.

A total of $9.7 million in fines was deposited into a trust fund to help cover the cost of the law. Monthly penalties for those who can afford health care but refuse will jump and could total as much as $912 for individuals by December.

On Tuesday, researchers released the first major survey of the health care law.

The uninsurance rate for Massachusetts adults dropped by more than half and residents were paying less in out-of-pocket health expenses, according to the report in the journal Health Affairs, which also found that low-income adults were more likely to have regular checkups and dental visits since the law took effect.

Researchers from the Urban Institute, a Washington think tank, interviewed 3,000 Massachusetts residents in the fall of 2006, just before the law took effect, and conducted a second round of interviews a year later.

Among the key findings in the report was the drop in the uninsurance rate among working-age adults from 13 percent to 7 percent. The biggest drop was among poorer residents.

Even among higher-earning residents, there was a smaller but significant decline in the uninsured.

"It's a very positive first year," said economist Sharon Long, the report's author.

Nearly 350,000 residents have been added to the ranks of the insured in Massachusetts under the law, which created a subsidized health care program for those earning less than three times the federal poverty level. It also created the Health Care Connector to help higher wage earners sign up for lower-cost, non-subsidized insurance plans.

The survey also found that people are paying less for health care-related expenses.

The share of adults reporting out-of-pocket expenses of more than $500 dropped by 4 percent, while the number of low-income adults reporting out-of-pocket expenses of more than $3,000 fell 8 percent.

Low-income adults were more likely to have a place to go when they were sick and were more likely to visit a doctor for preventive care.

Despite the increase in the ranks of the insured, the study found little effect on the use of emergency rooms for non-emergency care. And the fear that employers would begin dropping health coverage as the new law took effect hasn't happened.

Long said the study also included good news for policy makers: 71 percent of working-age adults expressed support for the law.

That will come in handy as lawmakers struggle to find ways to cover the soaring costs of the law.

"The continued challenge of health reform requires the continued support of the population and we find support for health care reform among adults in Massachusetts remains high," Long said.

In 2006, a legislative committee estimated the law would cost about $725 million in the fiscal year starting in July. In his budget, Patrick set aside $869 million, but those overseeing the law have already acknowledged costs will rise even higher.

Lawmakers are hoping to close the gap in part with a new dollar-per-pack cigarette tax.

"Our success has created a very big challenge for us," Senate President Therese Murray said.

The report was paid for by Blue Cross and Blue Shield of Massachusetts, the Commonwealth Fund and the Robert Wood Johnson Foundation.

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On the Net:

Health Affairs: http://www.healthaffairs.org