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Publications by Paul Masi for Health Policy Center

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In April 2006, Massachusetts passed legislation intended to move the state to near-universal coverage within three years, with key components of the reform effort targeting the role of employers. Based on surveys of working-age adults in the state in 2006 and 2007, this paper examines employers’ responses to health reform as reported by their employees. At roughly the end of the first year under health reform, employers in Massachusetts had made few changes in the insurance coverage they offered their workers. Long and Masi find no evidence that employers have dropped coverage, tightened eligibility for coverage, or changed the scope of benefits, network of providers or quality of care available under the health plans. Nor is their evidence that employers have shifted a greater share of the cost of health care onto their workers in response to health reform.

The Reinsurance Institute provided quantitative modeling and qualitative analysis to states as they explored reinsurance as an element of health reform. The project estimated the impacts of reinsurance, including changes in premiums, employer offer and enrollee take-up of coverage, numbers of people insured, and costs to the state. Small numbers of high spenders account for a large share of health spending, but most spending occurs in lower corridors of expense. Medical spending varies widely by age and health status, creating pressure for risk segmentation. Lastly, defining the eligible population determined whether reinsurance would cover new enrollees or solidify current coverage.

The Reinsurance Institute simulated the effects of reinsurance on individual and employer behavior, observing state-specific characteristics. We constructed a baseline database for each state by reweighting and combining multiple data sources to create a profile of individual-level demographics and health expenditures, allowing for the computation of individual-level premiums. We grouped health insurance units together into risk pools consistent with state market rules to calculate the change a reinsurance subsidy would have on the premium levels faced by individuals and employers. These price changes drove simulated changes in premium and coverage levels, offer and take-up rates, and state costs.

This report estimates the benefits and costs of alternative forms of state-funded medical reinsurance in Washington using the Urban Institute's Reinsurance Model. A subsidy targeted at all small firms would substantially increase primary coverage but would be very expensive, as most benefit would flow to already insured people. Targeting the conventional small group market by excluding association health plans would reduce state cost per newly uninsured person and would bolster existing regulatory requirements for that sector;s insurers to use modified community rating. Any practical program also needs to identify secure funding and maintain cost consciousness among newly reinsured health plans.

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