Can the Massachusetts Health Care Reform Work in the District of Columbia?

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Abstract

Massachusetts's 2006 universal health insurance reform expands Medicaid and uses new sliding-scale subsidies and purchasing mechanisms to make coverage more affordable for individuals and small businesses. Individuals must buy insurance, and employers must offer it or pay a small assessment. How feasible is this approach for the District of Columbia? DC has a relatively small uninsured population, generous publicly sponsored coverage, and an existing eligibility process to administer subsidies. But, its insurance market regulation and total safety net payments for uninsured care are low compared with Massachusetts, creating greater challenges if the District tries to replicate the Massachusetts model.

Introduction

The District of Columbia has taken significant steps in recent years to expand health insurance coverage for its low-income residents. However, 12.4 percent of D.C. residents (about 66,000 people) remain uninsured at any point in time (2004–2006). The state of Massachusetts enacted major health reform legislation on April 12, 2006. We examine the reforms being implemented in Massachusetts and assess which pieces may be of policy interest to the District.

Key Elements of Reform in Massachusetts

The Massachusetts reform seeks to achieve universal coverage by instituting an individual requirement to have insurance, expanding access to both public and private coverage to help individuals meet the requirement, and combining new and old revenue sources to finance these changes. The most important components of the reform legislation are the following:

• subsidized coverage, with both public and private options, for those below 300 percent of the federal poverty level (FPL);
• a purchasing arrangement designed to make affordable insurance available to individuals and small businesses;
• an individual mandate requiring that every adult resident of the state have health insurance if affordable coverage is available; and
• a small assessment on employers with more than 10 employees that do not provide coverage to their workers.

The legislation was a compromise among Governor Romney’s administration and the legislature’s House and Senate, each of which had a different vision of reform. The compromise passed almost unanimously in both legislative chambers, and Governor Romney’s veto of some key elements was easily overridden.
Medicaid expansion. The state’s Medicaid program, MassHealth, was expanded to give individuals and families broader access to public coverage. The state raised its income eligibility ceiling to 300 percent of FPL for children (about $41,000 a year for a two-person family in 2007). In addition, it ended enrollment caps on Medicaid coverage for certain groups of individuals with disabilities, HIV/AIDS patients, and the chronically unemployed. Together, these changes added about 50,000 adults and children to the program. The legislation also increased MassHealth payment rates to doctors and hospitals and restored some benefits that had previously been cut, such as dental, vision, and hearing services for adults.

The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.

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