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Comparing Maine Health Insurance Reform to Massachusetts

In early 2006, Massachusetts enacted legislation that explicitly required all citizens to have health insurance by July 1, 2007. A number of collateral steps were taken to implement this "individual mandate". Employers were required to offer health insurance or pay a modest penalty. A new infrastructure was established, the Health Insurance Connector, to arrange for the provision of "quality, affordable insurance products". In order to assure affordability, Massachusetts also provides state funded premium subsidies up to 300 percent of the federal poverty and expanded its Medicaid program to include children up to 300 percent of the federal poverty level. In an effort to provide greater underwriting stability and lower costs to the individual market, Massachusetts also required the merger of individual and small-group markets.

Not surprisingly, the individual mandate has led to signigicant, new enrollment. By August, 2008, in excess of 400,000 individuals had obtained health insurance coverage.

The policy shift that is embedded in the individual mandate cannot be understated. First, there is a clear affirmation of a market based approach to health reform. While government assures a minimum benefit levels and underwriting requirements, consumers select among alternative, private insurance plans. Secondly, while employers are encouraged to provide insurance, the responsibility clearly falls on the individual to secure coverage. Government's role is one of assuring that affordable options exist, through subsidies and/or required benefit levels.

The Massachusetts approach and its evolving results have been noticed by other states. California enacted a similar approach based on the individual mandate; implementation of which has succumbed to broader state budget limitations. Vermont's Catamount reform initiative references the imposition of an individual mandate in 2010 if coverage levels are less than 96 percent of the State's population.

The Massachusetts effort is clearly aimed at rebuilding and "de-fragmenting" the insurance pool. As noted above, there are however limits to what an individual state can accomplish.

Health reform has emerged as a principal policy initiative for the new federal administration. While few details exist, it is unlikely that a national health care system (similar to Britain) or even a single payer system will be adopted. Instead, early indications are that the many of the principles contained in the Massachusetts approach may be adopted by the Obama administration. These include:

• Maintaining the current employer based system, as well as Medicare and Medicaid.
• Identifying one or more options that will be available to individuals (outside of an employer based system) to access at an "affordable plan".
• Providing premium subsidies for lower income individuals.
• Mandating enrollment for at least some populations. Children have been initially defined but this mandate may be expanded to ultimately include all Americans.