Employers, Government and Consumers Share Burden of Health Reform, Study Says
On the third anniversary of Massachusetts' landmark health overhaul, a new report shows that employers, consumers and state government paid the same, proportionately, for health coverage after 2006 as they did the year before the initiative started.
The study, from the Center for Health Law and Economics at the University of Massachusetts Medical School found that employers contributed about half (48 percent) of the overall spending on coverage in Massachusetts in 2007. Individuals accounted for about a quarter of the total and government -- divided between the state and federal level -- contributed about 27 percent.
"With all the criticism from the left and the right before health reform started -- that individuals will have to pay more or that government will have to pay too much -- this says both of the concerns are unfounded," said Michel Widmer, president of the Massachusetts Taxpayers Foundation, a business-funded public policy group.
The foundation played a key role in creating the 2006 law.
The report, commissioned by the Blue Cross Blue Shield of Massachusetts Foundation, found that overall spending on health care coverage increased $4.7 billion or 23 percent. Nearly $21 billion was spent on coverage in 2005, while $25.5 billion was spent in 2007.
But the majority of the increase, the report found, was not because of the new law. Sixty percent of the increase was due to health care inflation unrelated to the law. Another 31 percent was linked to new enrollment in already-existing programs, such as employer-paid health care or Medicaid, according to the report.
More consumers have coverage, the study found, but they are paying more than what they were paying.
The 2006 law requires nearly everyone to have coverage or face a tax penalty. It also requires most employers -- those with more than 10 full-time equivalent employees -- to provide coverage or pay a penalty for each uncovered worker. The study found that consumers were paying a lot more, overall, in penalties for failing to have coverage -- approximately $16 million -- while employers paid $7.7 million
A state report released last week noted that 72 percent of Massachusetts employers offer health insurance to employees, whereas only 60 percent of employers nationwide offer coverage. Still, the report noted that many large retailers continue to rely on state subsidy program to provide health benefits to their workers.
Leaders at Health Care for All, a large consumer group that helped shape the state's 2006 law, are backing legislation that would require employers to contribute more to coverage.
"Our challenge moving forward is to ensure health reform's continued affordability for the state, employers, and individuals," said Lindsey Tucker, a policy manager at Health Care for All.
The full report from the Blue Cross Blue Shield of Massachusetts Foundation can be found here.
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Elizabeth Cooney is a former
health reporter for the Worcester Telegram & Gazette, where she also was a
business reporter and an editor. Earlier in her career, she edited medical
books and journals at Little, Brown, and worked for Boston magazine.Boston Globe Health and Science staff:
- Gideon Gil, Health and Science Editor
- Ishani Ganguli, Short White Coat blogger
There is a fair amount of revisionist history in the accounting of costs here. One of the arguments was that the health reform would control costs (there were cost control provisions in the law and there was supposed to be a reduction in uncompensated care). Of course, many correctly predicted it would not control costs.
The bottom line is that costs went up dramatically and any decent health care reform would control costs (whether it be inflation or increased access). It was clear that the "reform" was just another way to get even more to health providers.