The 2006 Massachusetts law that requires most residents to have health insurance increased the state’s health care spending by about $453 million in fiscal year 2011, compared with five years earlier, according toa new report from the Massachusetts Taxpayers Foundation.
The total cost was twice that, but the federal government covered half. The figure was about what some analysts expected, the report said.
“While critics periodically claim that health reform has been a ‘budget buster,’ additional state spending attributable to the health reform law accounted for only 1.4 percent of the Commonwealth’s $32 billion budget in fiscal [year] 2011,’’ according to the report.
The foundation, a nonprofit research organization that received funding for this report from the Blue Cross Blue Shield of Massachusetts Foundation, found that the biggest expense was in creating the Commonwealth Care program. The program covers the full cost of insurance for individuals who make up to 150 percent of the federal poverty level, or about $16,335 a year, and provides partial subsidy for those who make up to twice that amount. A hallmark of the 2006 law, it cost about $442 million over five years.
However, the report said that cost was largely offset by reductions in what the state paid hospitals to care for the uninsured and in lower payments to health plans that cover people on Medicaid.
The report also notes that the law has helped to propel the state into action on controlling health care costs. Here’s an excerpt:
A majority of the state’s primary care physicians are now participating in health plan contracts based on some form of “global payment,’’ which rewards the quality and efficiency of care rather than quantity, and several long-term contracts between health plans and hospital systems have been renegotiated at lower rates of payment. Payment reform has, in turn, been an added catalyst for hospital systems and physician groups to invest in better coordination of care and in improving outcomes for their sickest patients. In addition, Massachusetts has seen the rapid proliferation of health insurance products that allow employers and consumers to save money by using lower-cost providers or by choosing limited provider networks.
What do you think about the report? Is it fair? Overly optimistic about the state’s ability to control costs in the coming years? Share your thoughts below?