Looking at Massachusetts Health Insurance for Ideas in Missouri

Massachusetts' Experiences in Determining Affordability

As part of Massachusetts' health care reform law, a state agency is required to develop and update an "affordability schedule" for health care costs each year. Individuals with the lowest incomes (below 150 percent FPL) are not required to pay any premiums; individuals earning between 150 and 300 percent FPL receive a subsidy (between $39 and $116 per individual per month) toward the purchase of health care; and individuals between 300 and 600 percent FPL purchase insurance at a price set by a sliding affordability scale. Individuals earning more than 600 percent FPL ($62,400) must purchase insurance, no mater the cost.

Early data from Massachusetts suggests that some of the subsidized premiums may be unaffordable for low-income families. Of the 175,617 people enrolled in the new subsidized health plans, it is estimated that about 46 percent of the uninsured between 200 and 300 percent FPL have enrolled (compared to between 90-100 percent of people earning less than 200 percent FPL). Based on the lower enrollment numbers of the in the 200-300 percent FPL range, premiums for these plans may actually be unaffordable for this group. Individuals between 150 and 200 percent FPL pay about 2.6 percent of annual incomes in premiums, but individuals between 250 and 300 percent FPL pay about 4.9 percent of income. The difference in percent of income may explain why fewer people in the 200-300 percent FPL range enroll in insurance.

The lessons to be learned from the Massachusetts experience for Missouri include: the state's affordability scale does not account for cost-sharing and it is likely that health care becomes unaffordable for people who are older and less healthy; individuals with low to moderate incomes cannot afford premiums that are up to 5 percent of their income; and an affordability scale should extend up the income ladder, because individuals with chronic health needs may face difficulty in affording health care costs, regardless of income.