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

Health care is notoriously complicated, a fragmented system that often presents challenges for the average person to navigate. Even though most in Massachusetts have insurance, either privately through an employer or via a government-subsidized program, the level of confidence in easily accessing the system is low.

The goal for this column, informed by our foundation’s 20-plus years of experience of research, analysis and thought leadership in health care, is to cut through the clutter and provide clear and useful information to help guide readers through the Massachusetts healthcare system.

Parts of the whole

First, a few facts. Health care in Massachusetts is a $64 billion industry, ranging from world-renowned academic medical centers in Boston to pediatrician’s offices in small towns. Chances are you know someone who works in health care, as the industry accounts for nearly 1 in every 5 jobs.

There are many parts to the health care system, which are similar from state to state although a few are unique to Massachusetts. Breaking it down, the first layer of the health care system is the one closest to you: the providers, or the trained professionals who deliver 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 physician assistants and pharmacists, among others.

It’s not always obvious, but these days providers rarely work alone, due in large part to the consolidation trend of the past 30 years. Most are employed in a medical office setting in the community or connected to a hospital. Providers in groups are usually employed by an organization that makes it easier to address a variety of patient needs in a single location.

Organizations that employ providers are paid for the services they deliver to you and other patients, and for what is called “overhead”: their cost to run their operation. Who pays them? The next layer in the health care system: the insurers.

Benefits of insurance

The insurers are generally 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 Accountable Care Organizations (ACOs). Some insurers are for-profit companies but most in Massachusetts are nonprofit organizations.

How do providers and insurers figure out the cost of your health care? Simply put, they negotiate, eventually agreeing on how much and in what way they are billed and paid.

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

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

Employers typically pay the majority of the premium – the monthly amount the insurance company charges to insure you. The remainder of the premium is paid by workers and usually gets deducted from the paycheck. In addition to their share of the premium, people typically also pay a cost – copays or deductibles – each time they use health services.

Medicare and Medicaid

Many in Massachusetts get health insurance through a government-subsidized program such as Medicare or Medicaid. Medicare is a federal program that provides health coverage for people 65 or older, or those with a disability, no matter their income. Medicaid, branded as MassHealth in Massachusetts, is a health insurance program for people with low income. These programs decide how much they will pay providers – there is no negotiation – and offer a uniform set of covered services.

In addition to these private and public health insurance options, there is a third way for those who don’t get coverage through an employer and don’t qualify 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 just a few weeks every 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, which don’t cover maintenance such as oil changes and tire rotations, health insurance is required to offer basic services to help you stay healthy on the road of life. Think of “well visits” with your child’s pediatrician or an annual mammogram to check for breast cancer.

One additional layer in the health care system: regulation. Many state and federal agencies monitor the safety and quality of healthcare services in any setting. Most providers – such as doctors, nurses, and therapists – must be licensed, which requires them to meet a standard of care and to regularly update their education and training.

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

Audrey Shelto is president and CEO of the Blue Cross Blue Shield of Massachusetts Foundation, a private, nonprofit organization whose mission is to ensure equitable access to health care for all those in the Commonwealth who are economically, racially, culturally or socially marginalized.