Trying to understand health care and insurance in Massachusetts? This explainer may help

Healthcare is a proverbially complex, fragmented system that is often challenging for the average person to navigate. Although most in Massachusetts have insurance, either privately through an employer or through a government-subsidized program, the level of confidence in easy access to the system is low.

The goal of this column, based on our foundation’s more than 20 years of experience in health care research, analysis and thought leadership, is to cut through the clutter and provide clear and useful information to help guide readers through the Massachusetts health care system .

Parts of the whole

First, some facts. Healthcare in Massachusetts is a $64 billion industry, ranging from world-renowned academic medical centers in Boston to small-town pediatric offices. You probably know someone who works in healthcare, as the industry accounts for nearly 1 in 5 jobs.

There are many parts of the health care system that are similar across states, although some are unique to Massachusetts. If we break it down, the first level of the health care system is the one closest to you: the providers or trained professionals who provide health care services directly to you and your family members. Providers range from doctors, nurses and dentists, to mental health therapists and physical therapists, to medical assistants and pharmacists, among others.

It’s not always obvious, but suppliers rarely work alone these days, largely due to the consolidation trend of the last 30 years. Most are employed in a community medical office or affiliated with a hospital. Group providers are typically employed by an organization that facilitates the handling of various patient needs in one location.

Organizations that hire providers get paid for the services they provide to you and other patients, as well as for what’s called “overhead costs”: their costs to run their operation. Who pays them? The next layer in the healthcare system: insurers.

Insurance benefits

Insurers are usually described as “health plans,” but may have more complex names that lend themselves to abbreviations that may be familiar, including health maintenance organizations (HMOs), preferred provider organizations (PPOs), and organizations Accountable Care Organizations (ACOs). Some insurers are for-profit companies, but most in Massachusetts are nonprofit organizations.

How do providers and insurers determine the cost of your health care? Simply put, they negotiate, ultimately agreeing on how much and how they will be billed and paid.

Many people get health insurance through their employer. About 71% of Massachusetts companies offer insurance as of 2018, and the majority of employees have enrolled in coverage.

If you get health insurance from your job, your employer decides which health plans to offer you and how much your employer will pay the insurance company to provide that coverage to each participating employee.

Employers usually pay most of the premium – the monthly amount the insurance company charges to insure you. The rest of the premium is paid by the workers and is usually deducted from wages. In addition to their share of the premium, people typically pay a cost—a copayment or deductible—each time they use health care services.

Medicare and Medicaid

Many people in Massachusetts get health insurance through a government-subsidized program like Medicare or Medicaid. Medicare is a federal program that provides health coverage for people 65 or older or people with disabilities, regardless of their income. Mediboss, called MassHealth in Massachusetts, is a health insurance program for low-income people. These programs decide how much they will pay providers—there is no negotiation—and offer a single set of covered services.

In addition to these private and public health insurance options, there’s a third way for those who don’t get coverage through an employer and aren’t eligible for Medicare or Medicaid: buy your own. The place to go is the Health Connector, the state’s marketplace where you can compare plans and learn about subsidies. There are only a few weeks each year known as “open enrollment” when people can enroll in a health insurance plan for the next calendar year.

Down to the basics

Unlike most auto insurance policies that do not cover maintenance like oil and tire changes, health insurance is a must to offer essential services to help you stay healthy on life’s journey. Consider “treatment visits” with your child’s pediatrician or an annual mammogram to check for breast cancer.

An additional level in the health care system: regulation. Many state and federal agencies oversee the safety and quality of health care services in each setting. Most providers—such as doctors, nurses, and therapists—must be licensed, which requires them to meet a standard of care and regularly update their education and training.

All of these parts of the health care system may seem vast and complex, but they are meant to work together to keep people healthy by preventing and treating illness or injury and guiding patient recovery. We’ll dive deeper into the details and challenges in future columns.

Audrey Shelto is the President and CEO of Blue Cross Blue Shield of Massachusetts Foundationa private not-for-profit organization whose mission is to provide equitable access to health care for all those in the Commonwealth who are economically, racially, culturally or socially marginalized.

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