Troubling Cost Trends in Massachusetts Health Care

Two trends that might determine the long term success of health reform here in Massachusetts:

1) The Boston Globe ran an article about the immense upward cost pressure on the state’s Medicaid program. I blogged about the enrollment and cost increases in Medicaid about a week ago, here.

In addition, under the federal law, at least 90,000 people will be moved from the current state subsidized privately run CommonCare plans into Medicaid.

However, the double hit of enrollment increases are not the only issue:

“The state is also being pushed by Washington, which is cutting back its support. The federal government, which had been paying 62 percent of the state’s Medicaid costs as part of the stimulus program, will pay only 50 percent when the program ends this July.”

2) The second trend is the increased penalties levied on those that are uninsured. (The full State House News Service (SHNS) article on this topic can be found after the fold)

One has to start to wonder if there will be a tipping point at which people who can not afford insurance–simply leave the state and move to another state that has the much lower federal penalty?

SHNS:

STATE APPROVES INCREASE IN PENALTIES FOR HIGHER INCOME UNINSURED
By Michael Norton
Uninsured residents of Massachusetts who are deemed able to afford health insurance but fail to obtain coverage will face higher penalties next year under a plan quietly approved by the Patrick administration on Wednesday.

A Department of Revenue official on Thursday confirmed that the penalties, imposed under a 2006 state law that makes health insurance mandatory for most Massachusetts residents, will rise for individuals whose earnings total more than 300 percent of the federal poverty level.

About 55,000 Massachusetts taxpayers were assessed penalties for being uninsured in 2008, the last year for which numbers are available. At last count, those penalized had paid $13 million to the state, which has seen its Medicaid rolls soar since the 2006 law was approved and in the face of high unemployment.

For individuals between the ages of 18 and 26 with incomes above $32,496, the penalty for not having insurance in 2011 will rise to $72 per month from $66 per month, for a total annual penalty of $864, up from $792 this year.

For individuals 27 or older with incomes above $32,496, the monthly penalty will increase next year to $101, or $1,212 annually, from $93 per month or $1,116 annually.

For two-parent families in which both adults are uninsured, the penalties are doubled.

The state is not changing penalties for uninsured individuals and families with incomes up to $32,496 for an individual or $66,156 for a family of four, or those earning between 150.1 percent and 300 percent of the federal poverty level. Uninsured individuals in this group face penalties ranging from $19 to $58 per month, or $228 to $696 per year.

Individuals with incomes up to 150 percent of the federal poverty level, or less than $16,248 per year, and a family of four with an income of $33,084 or less, are not subject to the penalty and are not required to pay an enrollee premium for Commonwealth Care health insurance.

Massachusetts boasts the highest rate of insured individuals in the nation, in large part due to a surge in Medicaid enrollment over the past several years.”