Massachusetts law spurs rise in health coverage

BOSTON (Reuters) - Nearly half a million people obtained health insurance in the two years since Massachusetts enacted a pioneering health-care law, officials said on Tuesday, putting the state closer to covering nearly all residents.

The law, seen as a possible national model as traditional employer-based coverage shrinks nationwide, made Massachusetts the first U.S. state with near-universal health insurance when it went into effect in April 2006.

Between June 2006 and March 31, 2008, more than 439,000 people enrolled in private or subsidized health insurance programs, the state's Executive Office of Health and Human Services said in a report.

It said the growth reflected a big expansion in private coverage, which grew by more than 191,000.

"To have insured nearly a half-million people in less than two years is nothing short of remarkable," said Gov. Deval Patrick in a statement.

There was no estimate on how many people remain uninsured.

The law makes coverage mandatory through an "individual mandate" that requires virtually everyone to have health insurance or face tax penalties. For those earning less than the federal poverty level of $9,800 a year, coverage is free.

Those earning up to three times the poverty level can get subsidized plans, according to the legislation, which was signed into law by former Massachusetts Gov. Mitt Romney, a Republican, and backed by the state's top Democrats.

Ninety-three percent of Massachusetts residents, or 5.9 million people, had health insurance based on a 2004 survey. Of the 460,000 uninsured, about 40 percent earned more than the federal poverty level.

The bill was hailed at the time as a bipartisan attempt to reverse a trend that has left more than 47 million Americans uninsured.

But the legislation has been heavily criticized. Some health policy experts have questioned whether it can be sustained because it depends heavily in the long term on slowing growth in health-care costs, a prospect that some doubt will happen given the steady rise in costs in recent years.

More than 250 Massachusetts doctors signed a letter this year that said public funds for care of the poor that previously flowed directly to hospitals and clinics now flowed through insurers with higher administrative costs.

"While patients, the state and safety net providers struggle, private insurers have prospered under the new law, and the costs of bureaucracy have risen," said the letter.

The letter was distributed by Physicians for a National Health Program, an advocacy group that backs a single-payer government-run health-care system that would eliminate private insurance.

(Editing by Leslie Adler)