How Health Insurance Works in Massachusetts

The goal of universal healthcare coverage may not be that far out of reach, after all. A new report indicates that the rate of uninsured adults in Massachusetts has dropped by over half, and state residents are paying less in out-of-pocket healthcare expenses. In addition, the survey found that low-income adults were more likely to have regular check-ups and dental care since the universal coverage law went into effect in 2006. Under the law that subsidized healthcare for those earning less than three times the federal poverty level, almost 350,000 Massachusetts residents have become insured.

The Numbers

Recent statistics indicate that 95% of Massachusetts tax filers now have health insurance. During the 2007 tax year, about 86,000 people without insurance paid a penalty, a personal mandate that was a contentious part of the 2006 law. These uninsured tax payers forfeited their $219 personal exemption, with 6,000 people appealing the penalty. State government officials point to the numbers as evidence that the policy and the personal mandate are working. The progress corroborates other evidence of the success of healthcare reform, such as the commonly-cited statistic that 340,000 more Massachusetts adults and children have insurance this year than did last.

The Costs

The ambitious reform initiative is not without significant costs. For fiscal 2007, public funds paid $637 million for healthcare for workers and their dependents at large companies, which is a 14% increase from 2006. Some groups point to these figures as evidence that businesses should pay more, but most industry groups resist this notion. On the other hand, the personal mandate penalties for those without insurance resulted in $9.7 million going toward the Commonwealth Care Trust Fund. This penalty came from about 2.9% of Massachusetts adults who were uninsured but deemed by the state as able to afford it. About 2% of tax payers said that health insurance was unaffordable to them under the state’s criteria. For those who don’t qualify for the exemption and don’t purchase health insurance, penalties as high as $912 per year can be assessed.