How does the state’s health plan work?
In an effort to achieve universal coverage, Massachusetts essentially requires every resident to obtain health insurance—either through their employer, a private plan, or, for low-income residents, a subsidized state program. Those who don’t get insurance are fined about $1,000 a year, largely levied through the state income tax. Businesses with more than 11 employees must offer health insurance to their workers or pay annual fines of $295 per employee. This strategy, known as employer and individual mandates, also forms the backbone of reform bills making their way through Congress. The state, which enacted the reform in 2006, also created a fund to subsidize insurance for those who can’t afford it. Unlike the “public option” that has been pushed by President Obama and many congressional Democrats, this is not a separate government insurance plan, but a fund that pays for private insurance.

Has it succeeded?
In one important respect, unquestionably. Massachusetts now enjoys the lowest percentage of uninsured in the nation—2.6 percent, compared with 15 percent nationwide. More than 400,000 residents have health insurance for the first time, either because their companies began offering coverage or subsidies made the premiums affordable. The reform allowed Kathy Riley, 59, to get a state-subsidized plan for $51 a month, after losing her insurance when she gave up full-time work to care for her ailing mother. “This was absolutely perfect,” she says. “Otherwise I wouldn’t have any insurance.” A small percentage of businesses and individuals have opted to pay fines rather than spring for coverage, but the number of uninsured has been steadily shrinking. “People have talked about what we might do for years and years,” says Helen Darling, president of the National Business Group on Health, which represents large corporations. “This shows it can work.”

So it was a slam-dunk?
Hardly. The program has proved a lot more expensive than was anticipated. The timing didn’t help. As a result of the recession and massive job losses, tens of thousands of residents became eligible for subsidies, and the fund got tapped out. Indeed, the state’s soaring health costs fueled a $9 billion gap that had to be closed in June, leaving less for education, public safety, and other services. Earlier this year, the board that oversees the insurance fund voted to save $115 million by slowing enrollment and eliminating dental coverage. The state also reduced reimbursement payments to hospitals and increased the cigarette tax by $1 per pack.

Will that close the gap?
No. The deeper problem is that the cost of medical care keeps rising, and nothing in the state’s reform effort changed that. Proponents say that putting access before cost was intentional—it made covering the uninsured a moral imperative without forfeiting the support of providers, insurers, and employers. “It’s a lot harder to do cost and access together,” says Jon Kingsdale, who heads the agency that oversees the insurance program. “Everybody’s cost is somebody’s income.” But now officials are scrambling for new money. In June, a special commission recommended that the traditional “fee for service” model be replaced by one in which providers are paid a set amount for each patient, using a formula that rewards doctors who keep patients healthy. Some of the medical groups that supported the earlier reform vehemently oppose such a change.

What about access to health care? 
That’s another sore point. Once poor people had insurance, the state reasoned, they would stop using emergency rooms for routine medical care. So funds for these “safety-net hospitals” were reduced to help pay for the insurance fund. But demand at emergency rooms has only increased; more people are seeking medical care because they are insured, but there are not enough general practitioners to treat them. Meanwhile, Boston Medical Center, the state’s largest provider to the poor, recently sued the state, seeking higher reimbursement. “We kept the patients, but we didn’t keep the money,” says hospital executive Thomas Traylor, calling the lawsuit “a cautionary tale for national health-care reform.”

What can be learned from Massachusetts?
The Massachusetts experiment shows just how difficult fixing the health-care system may be, for both political and logistical reasons. Reform advocates prevailed by developing a broad bipartisan consensus (the measure was signed by then–Gov. Mitt Romney, a Republican), winning over key players in the insurance and medical establishments, and putting off until another day difficult questions about how to pay for it all. And the state had many advantages before it began: a relatively high percentage of insured residents, a robust economy (at the time), and above-average personal income. But many of the health-care system’s problems—from the high cost of care to such insurance-industry practices as denying coverage for pre-existing conditions—were not addressed. Liberals hope to tackle those issues next, but both sides agree the challenges are daunting. “This is a gargantuan task,” says Kingsdale, the program’s executive director. “It cannot all be thought out in one piece of legislation. Three years into it, we’re still learning.”

Decidedly mixed reviews
A plurality of Massachusetts residents does not think health-care reform is working. In a June Rasmussen poll, only 26 percent of the state’s voters rated health-care reform “a success,” while 37 percent called it “a failure.” Another 37 percent were not sure. Only 10 percent of voters said the quality of health care has gotten better as a result of the reform plan, while 29 percent said it has gotten worse; 53 percent said quality has not changed. Respondents’ political orientation has a major impact on how they view the issue: By a 37 percent to 17 percent margin, Massachusetts liberals consider the program a success; conservatives, by a 55 percent to 18 percent margin, say it’s been a flop. Democratic Gov. Deval Patrick says he has no illusions that the effort has been problem-free. “The great story about Massachusetts is that instead of waiting for the perfect solution—or doing nothing—we tried something.”