Pull Quotes from the forthcoming Financial Professional’s Guide to Healthcare Reform

February 12th, 2012 | Healthcare Reform | Medicare | Regulatory Matters | Seminars & Publications

As the November election looms, the issue of Romneycare and its relationship to Obamacare remains at the forefront. The Financial Professional’s Guide to Healthcare Reform contains an entire chapter devoted to the Massachusetts experience with Reform, carefully cited to state government documents that make clear the many negative economic consequences that offset the 97% coverage that was achieved.

“As will be seen throughout this chapter and the balance of the book, the extent of the federal legislation’s reliance on theMassachusettslegislation is striking.  As such, to gain an understanding of the federal legislation, it is necessary to first understand its source.  More importantly, the experience o fMassachusetts with its Reform, notably as reflected in the “new” 2010 legislation described at the end of the Chapter, portends what is likely to happen with the federal legislation.”

“’When Massachusetts passed its landmark health reform law (Chapter 58 of the Acts of 2006, An Act Providing Access to Affordable, Quality, Accountable Health Care), it established a model for the nation in creating a path to achieve near universal health insurance coverage for its residents. Chapter 58 was designed to expand coverage and, with over 97 percent of the state’s residents now insured, that effort has proven to be a success. However, the reform law of 2006 was not intended to tackle health care costs specifically, and the rapid annual escalation of costs is causing significant fiscal challenges. The state’s individuals, families, and employers, as well as state and local government, are all struggling under the weight of high and rapidly rising health care costs, which is creating barriers to accessing care, cutting into wage growth, stifling job creation, and preempting spending in other sectors of the economy.’[1]

“Leaving the barn door open may be unintended but losing the horse as a result cannot be unexpected.”

“The 2006 Reform legislation took place against a backdrop of spiraling healthcare costs and a desire for universal coverage along with then Governor Mitt Romney’s presidential campaign and looked to the small group market yet again as a place to cost-shift; a lesson for small business with respect to the same “reform” of the small group and individual market contemplated by the federal legislation.[i] “

“The 1996 Small Group Reform law described earlier banned small business from organizing into group purchasing cooperatives for the purpose of buying health insurance at lower rates and was designed to slow the exodus of small business into the self-insured market.  As noted earlier, the 2006 Reform in Massachusetts required the merger of the small group and individual insurance markets and resulted in an explosion in the cost of health insurance in the merged market as well as a dramatic increase in individual insured cost-sharing (co-pays and deductibles) and a reduction in benefits.  This market segment therefore experienced the most dramatic adverse changes and served as the catalyst for bringing the Massachusetts health insurance premium crisis to the forefront.  This is a key element of the legislative changes that took place in the summer of 2010.”

[i] The 2006 Conference Committee Summary stated:


“The bill merges the non- and small-group markets in July 2007, a provision that will produce an estimated drop of 24% in non-group [i.e., individual] premium costs. An actuarial study of the merging of the two insurance markets will be completed before the merger to assist insurers in planning for the transition. The bill also enables HMOs to offer coverage plans that are linked to Health Savings Accounts, reducing costs for those who enroll in such plans. Young adults will be able to stay on their parents’ insurance plans for two years past the loss of their dependent status, or until they turn 25 (whichever occurs first), and 19-26 year-olds will be eligible for lower-cost, specially designed products offered through the Connector.


“The bill creates a subsidized insurance program called the Commonwealth Care Health Insurance Program. Individuals who earn less than 300% FPL [Federal Poverty Limit] and are ineligible for MassHealth will qualify for coverage. Premiums for the program will be set on a sliding scale based on household income, and no plans offered through this program will have deductibles. The program will be operated through the Connector, and retain any employer contribution to an employee’s health insurance premium. The subsidized products must be certified by the Connector as being of high value and good quality. For individuals who earn less than 100% of the Federal Poverty Level ($9,600/yr), special protections in this bill provide for subsidized insurance products with comprehensive benefits, and waive any premiums. Currently, most childless adults are not eligible for MassHealth at any income level, unless they are disabled or have very little history of employment.”[i]



[1] Division of Health Care Finance and Policy (DHCFP), “The Health Care Cost Challenge and Policy Recommendations forMassachusetts”

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