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Mass. may find US health care changes costly

As rules stand now, poorer to pay more

By Patrick Lee
Globe Correspondent / June 22, 2010

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In most states, the passage of the sprawling federal health care overhaul legislation means the poorest will have a better shot at affording health insurance. But in Massachusetts, the law might have the opposite effect.

Senator John. F. Kerry, state leaders, and health care advocates met yesterday to discuss a new report that highlights the major differences between the federal and state health care models.

The focus of the event quickly turned to the hurdles of implementation and the need to protect the gains Massachusetts has made since 2006, when the state embarked on a closely watched experiment to extend health insurance to virtually every resident.

The report reveals that, despite the promised increase in federal funding, some Massachusetts residents might end up facing higher premiums.

“None of us have approached this with the idea that it’s a done deal, that just because we passed it, we can go home and everything’s going to work smoothly,’’ said Kerry, a Massachusetts Democrat. “It’s not.’’

The report, released yesterday by the Blue Cross Blue Shield of Massachusetts Foundation, highlights the projected benefits and drawbacks of putting the new federal health care law into action.

Beginning in 2014, Massachusetts is expected to start receiving at least $425 million a year in federal money to help pay for health insurance.

About a third of that will be used to subsidize premiums for consumers who do not qualify for Medicaid and make less than $43,000 a year.

The state’s Commonwealth Care program, which aids low-income adults who do not have insurance through their job, currently provides more generous subsidies than the federal program would, but it covers fewer people, only those with an annual income at or below $30,000.

Without a commitment from the state to maintain current subsidy levels, the poorest in the state would, in four years, face significant increases in average annual health care costs.

Under the Massachusetts program, people who earn about $15,000 annually incur health care expenses that average $295 a year, the report said. Under the federal program, these same individuals would have to spend about $626 a year, more than double the cost.

“Some of them would manage to stay covered even with a lower subsidy,’’ said Robert Seifert, coauthor of the report. “But there have got to be people who are sort of on the edge now, and if their subsidy shrinks, they wouldn’t be able to afford coverage.’’

A 2009 survey, also commissioned by the foundation, found that individuals who make $30,000 a year or less, that is, those who would be most affected by the lower federal insurance subsidies in 2014, are about 40 percent of the state’s adults under age 65.

Seifert emphasized that the outcome of federal health care changes in Massachusetts largely depends on state-level negotiations on how to spend the funds freed up by increased federal support.

Given the large number of issues left to be tackled by future federal and state regulations, observers of the health care bill’s implementation insist that Massachusetts must take a lead role in the process.

Robert Blendon, a health policy analyst at the Harvard School of Public Health, has conducted several polls tracking national public opinion on health care.

His polling has found national support for health care changes to be substantially weaker, about 45 percent, than the backing the Massachusetts plan received when it was passed in 2006, when support exceeded 60 percent.

Blendon said public opinion will hinge on showing that health care costs can be contained even while coverage expands.

Much also rests, he said, on the political will of national and state legislators to find new solutions to keep up with implementation.

“The leadership community on this issue in this state, for the last 30 years, has been 50 years ahead of the rest of the country,’’ Blendon said. “But if [in] four years we cannot reach agreement within the state, it’s going to undermine the implementation of the bill nationally.’’

Regardless of what public sentiment looks like in 2014, the state will have to meet the timeline for health care changes.

Glen Shor — executive director of the Commonwealth Health Insurance Connector Authority, which oversees the Commonwealth Care program — said state leaders will have to “put a new stake in the ground’’ in redefining what qualifies as affordable coverage in light of the new national plans for insurance subsidies.

Only then, he said, can the state decide how to respond to the expanded but less generous federal tax credits that will replace at least part of the subsidy currently provided by Commonwealth Care.

Patrick Lee can be reached at patrick.lee@globe.com.

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