Massachusetts: Getting a Head Start on the Affordable Care Act

Now that the biggest challenges to the Patient Protection and Affordable Care Act (ACA) have been overcome, it's up to the states to comply with the law. One state that knows a little about health care reform is Massachusetts, which has had mandatory health insurance since 2006. However, state officials say that despite the head start, there are still improvements to come thanks to the ACA.

"Because we are the model for national health care reform, people think it will have little impact on us, but it's going to have a major impact on us for the better," says Stephanie M. Nichols, a spokeswoman for the Health Connector, the independent state agency created to help Massachusetts residents find health insurance coverage.

Here's what Massachusetts is doing to prepare.

Understanding the Transition

Under the ACA, the states are responsible for setting up a health insurance exchange, a system in which individuals and small businesses can shop for health insurance and take advantage of tax subsidies if they are eligible. The exchanges must be ready to enroll consumers by Oct. 1, 2013, and they must be operational by Jan. 1, 2014. States can choose whether they run their own exchange or partner with the federal government. States that don't make a choice will default to having the U.S. Department of Health and Human Services set up and run--at least initially--their exchange.

Beginning in 2014, states also have the option of expanding Medicaid to cover those making 133 percent of the federal poverty level, estimated to be approximately $29,000 for a family of four.While the federal government will pick up the tab for most of the Medicaid expansion in 2014, states would have to pay 10 percent of the cost by 2020 (pdf). If all states were to implement the Medicaid expansion, more than 21.3 million additional people would be enrolled in Medicaid by 2022, according to a report by the Henry J. Kaiser Family Foundation and the Urban Institute. However, as of early January, nine states had refused to participate, while an additional five were leaning against it.

An Early Adopter

Because health care reform existed in Massachusetts before it reached the rest of the nation, the state does not have a high percentage of uninsured residents. Currently, 98.1 percent of the population in Massachusetts is insured, with 99.8 percent of children and 99.6 percent of seniors having health insurance, says Nichols.

Still, Massachusetts decided early on that it would enact the Medicaid expansion, which will provide the state with increased federal funding. In fact, in remarks after the Supreme Court ruling in favor of the Affordable Care Act, Gov. Deval L. Patrick said, "We are in an early-expansion state, as you know, and we're expecting further resources from [the] federal government to sustain the experiment here in Massachusetts." An estimate by the Center on Budget and Policy Priorities projected that 88,000 more uninsured adults in Massachusetts will be eligible for Medicaid under the expansion.

Massachusetts also has an insurance-exchange system--the Health Connector--already set up, so the state doesn't have to create an exchange from scratch. However, it may have to make some modifications to the way the exchange runs. The Health Connector currently lets residents select health insurance plans that meet state requirements, though the ACA will usher in new tax credits and subsidies that residents may be able to take advantage of. Today the state offers subsidies to individuals and families with incomes that are up to 300 percent of the federal poverty level, which is $66,000 for a family of four. Beginning in 2014, tax credits will be available to Massachusetts residents with incomes up to 400 percent of the federal poverty level, which is $88,200 for a family of four.

As a result of the ACA, Massachusetts is also benefiting from $98,810,805 in grants designated for research, information technology development and implementation of the exchanges. For example, residents will be able to go to the Health Connector website, input information such as their income and age and find out immediately what types of subsidies they may qualify for, according to Nichols.

Massachusetts residents are also benefiting from other grants as a result of health care reform, including $773,000 for the Personal Responsibility Education Program, an initiative to educate youth on how to prevent sexually transmitted diseases, including HIV/AIDS.

While Massachusetts has embraced the changes brought about by the Affordable Care Act, state health care officials are still looking to other parts of the country for different ways to make the health care system more effective. "Every state is different, and every insurance market isdifferent, so we actually look forward to seeing what other states do because they might come up with things we hadn't thought about," Nichols says.

Tamara E. Holmes is a Washington, D.C.-based journalist who writes frequently about health and wellness.