Universal Health Coverage Lowers Uncompensated Care Expense in Massachusetts

Massachusetts’ landmark health care reform law is taking a bite out of its hospitals’ uncompensated care expense – at least in some parts of the state.

Hospitals in the northeast saw their uncompensated care expense decline almost 20 percent, according to an analysis from the Massachusetts Hospital Association. Spokesperson Rich Copp said the central region of the state saw an 8 percent increase in uncompensated care expense. 

“It’s a mixed bag,” he said. “In some parts of the state, specifically the Boston area, we saw significant decreases. But in other parts we saw an increase in uncompensated care – most noticeably, the central part, Worchester.”

The Massachusetts law required residents to obtain health coverage by July 2007 that satisfied certain guidelines or face financial penalties when they file income taxes. Employers also are required to provide health care coverage for employees or pay a fee into a state health care coverage pool. Results from the law are being analyzed and released on a delayed basis. Copp said the association expects to release in a few weeks an analysis of the law’s impact covering the third quarter of 2007.

Copp said association analysts aren’t sure why the regions are having different results with uncompensated care expense, which includes bad debt, charity care and discounts to the uninsured. He speculated that the regions with higher uncompensated care expense experienced a lag time between uninsured resident enrollment in health plans and a decrease in demand for free care. Experts may also have underestimated the number of uninsured in the state, or there may have been a more aggressive effort by urban health care providers to get the uninsured enrolled in health plans, Copp said.

“This is unchartered territory,” Copp said. “We’re the only state (that has taken universal health coverage) on. We will watch this and work closely with the state to adjust and tweak the free care pool to evolve with health care reform.”

An estimated 300,000 residents, or 5 percent of the state’s population, have joined the ranks of the insured in Massachusetts since the law took effect in June 2006, according to the Commonwealth Health Insurance Connector Authority. The state agency was set up to help residents find coverage that meets their needs among the major insurance plans.

“This has frankly exceeded everyone’s loftiest expectations in term of enrollment and providing access to care,” Copp said. “People want the comfort and security of knowing that they have access to quality healthcare. It also says that when all stakeholders come together … you can make it work.”