The state of Massachusetts, with its state-sponsored healthcare system in place since 2007, served as template for the healthcare reform known as The Affordable Care Act. Now it is also held up as a window into what United States healthcare will look like once Obamacare is fully rolled out next year. But because it embarked on what came to be known as Romneycare six years ago, the state will likely experience the implementation of Obamacare quite differently than the rest of America.
Like the Affordable Care Act, Romneycare was passed to increase the fraction of the population with health insurance by imposing mandates on employers and employees and by subsidizing health insurance for middle-class families without employer plans. Some healthcare law experts believe that the second provision would prompt employers, who already offer health benefits to their low- and middle-income workers, to end that practice if they are not required to by the law’s first provision. This would result in millions of people losing the opportunity to get health insurance through an employer.
So far, this problem has not materialized in Massachusetts; the propensity of the state’s workers to receive employer-sponsored insurance was hardly different after Romneycare went into effect than before. Still, as The New York Times explains, Massachusetts is not a replica of the United States in miniature. It has a different population and business environment than the rest of the nation.
Employers in Massachusetts have not shown the propensity to drop health benefits for low- and middle-income workers, those who live in households below 300 percent of the federal poverty line, because its demographics are different than the United States as whole. The state has an extraordinary fraction — close to two-thirds — of its population living above that level, and so a majority of Massachusetts employers prefer to keep providing health benefits, though many employers elsewhere in the U.S. may not.
Comparatively, these employers distribute varying — but significant — portions of their payrolls on workers from families below 300 percent of the poverty line. Cutting health benefits for these employees would save a great deal of money and transfer the cost to the federal government.
The difference between Massachusetts employers and employers elsewhere in the United States can be quantified by the percentage of payroll spent on employees from families below the 300 percent of the poverty line, which is the line the government uses to divide the higher-income earners from the middle- and low-income earners. The national average is 20 percent, compared with 13 percent in Massachusetts. Furthermore, no single Massachusetts industry has 26 percent of their employees under 300 percent of the poverty line, while at a national level, restaurants and household employers have a 50 percent average.
Because the percentage of U.S. workforce at risk of losing its employer insurance is three times the percentage of the Massachusetts workforce in the same situation, employers in Massachusetts are far less likely to drop their employee health plans over the next few years than employers in the rest of the nation.
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