Massachusetts efforts toward near-universal health coverage may be hindered by affordability issues despite state reform efforts to bring down the cost of coverage and create state- and employer-supported plans, according to a study released by the Center for Studying Health System Change, a nonpartisan policy research organization in Washington.
Funded by the Robert Wood Johnson Foundation, the study, Massachusetts Health Reform: Employers, Lower-Wage Workers and Universal Coverage, was based on interviews with 25 market observers in January. Researchers found that employers and individuals felt the current cost of health insurance could prohibit them from complying with coverage mandates implemented by state legislators in 2006 and 2007.
Last year, the state began requiring employers with more than 11 workers to offer cafeteria-style plans that allow workers to purchase health coverage with pretax dollars. Companies that dont make a fair and reasonable contribution to the plans must pay $295 per worker. In July, Massachusetts individual-coverage mandate went into effect, requiring all except a small percentage of exempt residents to purchase health insurance or pay a tax penalty. Market observers noted that unless state officials are able to reduce and contain the cost of health coverage, many small employers and individual residents may decide they cant afford coverage and opt to pay the tax penalties instead.
It may take a few years, however, for health-insurance reformers to determine the true effects of the penalties, researchers said. Thats because while the individual penalty is designed to increase over time, the first years fee, $219, is relatively small. Also, most small employers have already renewed their coverage-plan offerings for 2008, so it will be some time before healthcare policy makers know whether a growing number of businesses are complying with the law. -- by Shawn Rhea
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