February 28, 2014

For the full report see: 

Ongoing Analysis of the Health Safety Net Trust Fund: The Religious Exemption from Mandated Health Insurance Coverage, February 2014 pdf format of Ongoing Analysis of the Health Safety Net Trust Fund The Religious Exemption from Mandated Health Insurance Coverage file size 1MB

Since 2004, the Legislature has directed the Office of the Inspector General (“Office”) to study the Uncompensated Care Pool and the Health Safety Net program (“HSN”).  This year, pursuant to its mandate under Section 160 of Chapter 38 of the Acts of 2013, the Office examined claims for reimbursement submitted to the HSN for health care services provided during calendar year 2012 to individuals who claimed the religious exemption to the requirement that all adult Massachusetts residents have health insurance.  From the inception of this review, the Office has recognized that there are individuals who hold sincere religious beliefs that would cause them to decline substantially all forms of health care treatment; those individuals were not the subject of the Office’s review.

To assist the Office’s review, the HSN Office, which runs the HSN program, provided the Office with the names of individuals for whom health care providers submitted claims to the HSN for services provided in 2012.  The HSN Office also worked with the Massachusetts Department of Revenue (“DOR”) to provide the Office with the names of the taxpayers who filed for the religious exemption for calendar year 2012.  The Office’s comparison of the two lists yielded 401 individuals who both filed for the religious exemption and received health care services during calendar year 2012.  The HSN paid providers $427,541.92 for these health care services.

The Office’s review indicates that there are a number of individuals who are claiming the religious exemption even though they received health care treatment during the year for which they claimed the exemption, and even though they have a substantial history of participation in the health care system.  This is contrary to both the intent and letter of the law, and the HSN should not be paying for health care for individuals who should be purchasing health insurance.  This is also unfair to the Massachusetts residents who have obtained and maintained health insurance coverage, as well as to those who have paid the penalty for not having such coverage. 

Based on these findings, the Office recommends that:

  1. The DOR and the HSN Office should run annual data matches to determine whether taxpayers who claimed the religious exemption also received health care services paid for by the HSN.  As a result of the Office’s review, the HSN Office and the DOR recently conducted this match for calendar year 2012.  Currently, the DOR is in the process of analyzing its next steps with regard to that group of taxpayers.
  2. The DOR and MassHealth, the Massachusetts Medicaid program, should explore conducting an annual data match to determine whether taxpayers claiming the religious exemption are enrolled in MassHealth.
  3. The DOR should work with the Center for Health Information and Analysis (“CHIA”) to determine whether private health insurers are paying for medical care for taxpayers claiming the religious exemption.  CHIA maintains an all-payer claims database that could be instrumental to such a data match.  Performing this match will allow the DOR, which has collected $119 million since 2008 from individuals who did not maintain mandated health insurance, to enforce the health insurance requirement equitably by ensuring that individuals who claim the religious exemption are complying with the applicable statutes and regulations. 
  4. The HSN Office should work with its partners to determine whether any alternate health care coverage exists for the individuals who are both filing for the exemption and receiving health care treatment to ensure that the HSN is truly the payor of last resort in Massachusetts. 
  5. The DOR should consider clarifying its instructions and form relating to the religious exemption to ensure that taxpayers are not erroneously claiming the exemption.  The DOR has expressed its willingness to consider making revisions to its documents.