Massachusetts implemented health care reform to increase employer-based insurance and to provide no-cost or low-cost insurance to those unable to afford it but it hasn't worked - the uninsured in Massachusetts remain predominantly the working poor, according to a new study by researchers at Harvard Medical School.

The 2006 comprehensive health care reform was designed to achieve 'universal' health coverage and did so using new laws requiring that employers with more than 10 employees offer insurance but also mandating that all state residents obtain insurance or pay a fine. Free or low-cost, subsidized insurance was offered to state residents with low incomes.  Result: the poorest still had insurance, as did the richest, but the 'working' poor could not afford it.  Estimates put the number of uninsured in the state at high levels - last week the Census Bureau released its survey which found 370,000 people to be uninsured in Massachusetts. That's 5.6 percent of the state's population.

  The study authors also point out that the Massachusetts health care reform law served as the model for the national health reform law, the Affordable Care Act (colloquially called ObamaCare by opponents) and thus may suggest even larger difficulty ahead for nationalized health care. 

To understand where it went wrong, the study authors surveyed 431 patients ages 18-64 who were visiting the emergency room of Massachusetts' second largest 'safety-net' hospital. The results were published online in the Journal of General Internal Medicine.

Theyfound that of the 189 patients without health insurance, two-thirds (65.9 percent) were employed, but only a quarter had access to employer-sponsored insurance. One-third (35.2 percent) of uninsured patients reported having lost previous insurance coverage, with the majority of these (51.9 percent) having lost their coverage due to loss of a job or transition from one job to another.

More than 85 percent of the uninsured patients interviewed had incomes low enough to qualify them for free or low-cost, state-subsidized private insurance. Nonetheless, one-third reported being uninsured because they could not find affordable insurance.

The majority of the uninsured were aware of the new legal requirement that they carry health insurance or pay fines but nearly half said that they had been unable to find insurance they could afford. That makes sense; when you require something and penalize people who don't do it, there is no incentive for the cost to come down.

"These findings illustrate that tying insurance to employment can be an unstable mechanism for providing coverage," said the study's lead author, Dr. Rachel Nardin, a neurologist at Cambridge Health Alliance. "We found that employer-based coverage failed the self-employed; those who worked for firms that did not offer insurance, especially small firms exempt from a requirement to offer insurance; and the poor who could not afford employer-sponsored insurance even when it was offered to them. The system of coverage also failed those who lost their job, which is particularly problematic with the current economic downturn."

Senior author Dr. Danny McCormick, an internist at Cambridge Health Alliance, said, "It appears that for people with very low incomes, even state plans with subsidized insurance premiums may be too costly. Also, under the reform law workers who are offered employer sponsored insurance but decline it due to cost are not eligible for state subsidized insurance, no matter how poor they are. If we are serious about the goal of universal coverage, we will need to further reduce or eliminate the financial barriers to getting insurance that still clearly exist in Massachusetts."

Only 5.6 percent of the interviewees were uninsured because they didn't think they needed insurance, which suggested to the authors there were few seeking a so-called free ride.  Indeed, some young people have never carried insurance because in the beginnings of their careers they don't need it and the money would be better spent on other things, rather than subsidizing the health care industry.

"While the reform substantially reduced the number of uninsured in our state, it failed to fully reach the demographic groups it targeted. Our findings emphasize the fragility of a reform requiring voluntary uptake, periodic renewal, dependence on employment and cost-sharing," said McCormick. 

Nardin commented, "In Massachusetts, we had about 10 percent uninsured before the reform. In many other states, the uninsured rate is in the 20-25 percent range. If our results are any indicator, the national reform may leave many working poor uncovered.

"Although arguments about political feasibility are a major challenge, our study suggests that a comprehensive reform guaranteeing coverage to all residents without eligibility restrictions — such as that provided by many single-payer systems — would be a more effective way to achieve universal coverage than the Massachusetts reform."