The Massachusetts Health Reform Plan: A Brief Overview (CRS Report for Congress)
| Release Date |
May 26, 2006 |
| Report Number |
RS22447 |
| Report Type |
Report |
| Authors |
April Grady, Domestic Social Policy Division |
| Source Agency |
Congressional Research Service |
Summary:
In April 2006, Massachusetts passed legislation that aims to achieve near-universal health
insurance
coverage by expanding Medicaid and State Children's Health Insurance Program (SCHIP)
eligibility,
providing premium subsidies for certain individuals, and mandating the purchase of insurance for
those who can afford it. To make private health insurance plans more affordable and accessible, it
modifies state insurance laws (e.g., it merges the state's non-group and small group markets)
and
creates a public entity called the Connector to serve as a clearinghouse for the purchase of insurance
by small employers and individuals who are not offered subsidized insurance by a large employer.
To pay for the legislation, the state will redirect some existing Medicaid funds that are used to
reimburse health care providers (primarily hospitals) for treating uninsured and other patients who
generate uncompensated care costs. It will also obtain additional federal Medicaid and SCHIP
dollars using new state general fund appropriations and revenues from employers that do not offer
health insurance. Another significant source of funding, while not necessarily flowing through state
coffers, is the mandate that requires individuals to purchase insurance or face financial penalties.
Over time, the state expects to redirect additional funds from uncompensated care reimbursement
to other uses (e.g., premium subsidies) as its uninsured rate declines. However, the legislation
continues to provide significant support for hospitals and other providers.
This report highlights major elements of the Massachusetts legislation and raises issues that
Congress and other observers may consider as details of the state's health reform plan are
worked
out during implementation. It will not be updated.
