Uninsured Rate Among Cape Codders Higher Than State Averages

By: Michael C. Bailey
Published: 12/18/09

The Massachusetts Department of Revenue has released its annual update on residents’ compliance with the state’s “individual mandate,” the component of the 2006 health care reform act that required residents to have health insurance or face a penalty on their income taxes.

According to the report, in the 2008 tax year – the second year of enforcement on the individual mandate – more than 3.8 million people who filed a state income tax return out of 3.95 adult filers had insurance for at least part of 2008, for a 96.4 percent compliance rate.

Earlier this year JudyAnn Bigby, the state’s executive secretary of health and human services, announced that the overall rate of uninsured residents was 2.6 percent -- that figure including all residents, not just tax filers.

The Cape falls far below that rate. According to the Barnstable County Department of Human Services’ 2009 “Monitoring the Human Condition” report, 11.7 percent of adults on Cape Cod -- about 26,000 people -- are uninsured, more than four times the state rate, and 16 percent of all households have someone that is not insured.

The high cost of living on Cape Cod is a factor for four out of every 10 households. The section of the report focusing on “market basket” expenses – typical expenses for any given household – indicated that 42 percent of households had a problem paying for medical insurance.

Warren Smith, data analyst for the Barnstable County Department of Human Services, said the affordability issue was a driving factor. According to US Census Bureau, Barnstable County’s median income level (as of 2007) was $59,365, about $3,000 less than the state median. A household of four with a gross annual income level of $66,156 is eligible for coverage through the state-subsidized Commonwealth Care program.

However, Mr. Smith said he found claims of a 2.6 percent uninsured for Massachusetts “ridiculously low compared to any data we’ve seen…it would be an astounding number if it were true.”

He said the state typically uses telephone polls instead of surveys by mail, the approach utilized for the Human Condition studies, and phone surveys “I think miss more people than they catch…but we (at the county level) get very consistent data year-to-year.”

Mr. Smith added the data reported this year was gathered in 2008, the first year in which the state levied a full penalty against taxpayers who did not have coverage, and the relatively high uninsured rate might reflect a delay by Cape residents in finding insurance or a delay in receiving coverage through the state.

Residents who were without health insurance at the end of 2007 simply lost their personal exemption on their state income tax return for that year, which amounted to an average of $219 per person. Approximately 118,000 people were subject to this penalty in the 2007 tax year.

People who did not have health insurance for all or part of 2008 were subject to a standard penalty of $89 per month without insurance if the DOR determined they could afford it (as per state affordability guidelines), and if they were not eligible for an exemption, such as for religious reasons (an exemption granted to only 551 people).

More than 84 percent of the 53,000 uninsured filers – about 45,000 people -- were hit with a penalty, down from 60,000 people in 2007. The DOR has so far collected approximately $16.4 million in penalties for tax year 2008.

Today marked the last day for public comment on the draft 2010 penalties for failing to have health insurance. The proposed maximum penalty for next year is $93 per month (for a person age 27 or older making 300 percent of the FPL level or more).

Penalties for married couples who can afford health insurance but who lack coverage will equal the sum of the penalties for each spouse.

The full Massachusetts Department of Revenue report is available online.