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The Observer

Lost in the labyrinth

It's time for the doc to order a dose of healthcare reality

Email|Print|Single Page| Text size + By Sam Allis
Globe Columnist / March 30, 2008

The mere thought of exploring the labyrinth called Chapter 58 gives me a case of the vapors.

The statute, which mandates health insurance for everyone previously uncovered, went into effect last year in a forest of fine print that has left people wall-eyed.

Most of us, and plenty of Beacon Hill types who passed it, are clueless today about Chapter 58. Which reminds me of the line from the great screenwriter William Goldman about Hollywood: "Nobody knows anything."

The Observer skirted the Chapter 58 policy morass last week and wandered instead to the Codman Square Health Center in Dorchester for a hit of reality. It is in community centers like Codman, along with hospitals, that we first see the new system bite.

I ask Bill Walczak, founder and CEO of Codman, what changes he is seeing after Chapter 58's first year in operation.

"An exponential increase in bad debt so far this fiscal year. It's up from $700,000 to at least $1.3 million," he says, based on projections from the first four months. "We're also losing between $800,000 and $1 million in cash."

So what's the prognosis?

"Our mission is to see people regardless of means," he says. "We can survive a year or two of this kind of craziness, but a couple of years down the line, the safety net will no longer be protected, and we'll have to start dismantling the operations that serve our people. This new system should not hurt the safety net."

"So far, we've been able to insulate the quality of care from the financial damage," he adds, "but that can't go on forever. There are winners and losers in this equation and we're losers."

Walczak says half of his patients were uninsured three years ago, but they were covered by the Massachusetts Uncompensated Care Pool, the old system that handled such people.

The good news is that far fewer patients are still in the pool, now under a different name. More have some kind of insurance today. The bad news is that the safety net is shredding, and 10 percent of his patients have, in Walczak's words, "fallen off a cliff."

Also, the first 50,000 of the uninsured put into the new program last year are completing year one. Over half of them have not signed up again as they're required to do. Many, Walczak notes, never signed up in the first place and have no idea what to do now.

"Health centers like Codman Square and the Dorchester House serve the working poor - people who have bad jobs, low wages, and no health insurance," he says. "The really poor have Medicaid. Medicaid was enlarged last year. This is good. The problem with the new model is that far more people than anticipated don't have insurance."

Chapter 58, he notes, was based on the assumption there were between 300,000 and 400,000 uninsured people in the state. The real figure is somewhere between 600,000 and 700,000, he says, and a lot of people working on the program knew that.

Walczak ran the numbers on a hypothetical 58-year-old woman who earns $32,000 a year. Under Commonwealth Choice, her cheapest option costs her $4,400 a year in premiums. There will also be a co-pay every time she sees a doctor, but she first must exhaust a $2,000 deductible to get anything back at all. If hospitalized, she'll face a 20 percent coinsurance payment.

"This is an entitlement to bankruptcy if someone actually needs healthcare," he continues. "The number one cause of bankruptcy in this country is medical costs."

Everyone in the state must have annual proof of membership in some health insurance program to avoid fines. Without proof, the state will come after you. The fine for not enrolling in a Chapter 58 program can run as high as $912 a year.

Say I'm earning $31,212 - 300 percent of poverty and, like the hypothetical woman, am forced into Commonwealth Choice. But I don't sign up for it because my company has dropped overtime pay, my wife's salary has been cut in half, and my balloon mortgage just ballooned.

So what's going to happen to a criminal like me, or the 26-year-old criminal struggling in a start-up, or the criminal restaurant cook?

Will we be dragged off in the middle of the night by storm troopers and thrown in the clink? Will the state garnish our wages and hasten our descent into bankruptcy?

I figure the young fry will head for Pawtucket because Rhode Island has no mandatory health insurance program, but I have no idea what will happen to families who can't pay and don't want to move. I just don't see where this thing goes.

Walczak says there's plenty to like in Chapter 58: More than 300,000 people now have some kind of insurance who didn't. Medicaid has expanded its rolls by 70,000. There is new Medicaid coverage for eye care and dental coverage for adults. But big problems are emerging.

We now know the estimates of the uninsured, along with the notion that the new system would teem with young, healthy people who wouldn't cost much, were absurd. There is a major cohort of older people as well who need serious medical treatment at significant expense. Who planned this thing?

Don't blame the elderly here. It's not their fault that we've always provided a safety net, however frayed, for them. Just pray that Chapter 58 doesn't take it away.

Sam Allis can be reached at allis@globe.com

Correction: Because of reporting errors, the Observer column in last Sunday's Globe incorrectly stated that all people previously uninsured are mandated to join the Commonwealth Connector health insurance program. The mandate applies to adults only, and there are affordability exceptions. The column also incorrectly said that adults must show proof of insurance each year to avoid tax penalties. There are affordability exceptions. In addition, it was incorrectly reported that a 58-year-old woman earning $32,000 a year is forced into the Connector sytem. She is not, and she receives a minimum of three free initial doctor visits before a $2,000 deductible begins.

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