Crowd-out—when public insurance programs displace private ones—has been a big concern in health reform. Anticipated crowd-out was one reason the Bush Administration opposed SCHIP expansion earlier this year, and critics of other health proposals (including Barack Obama's) fear that adding more public options would lead to a stampede away from private plans. A new study on the first year of health reform in Massachusetts, up on Health Affairs web site, suggests that's not the case.

We found no evidence of a drop in firms offering health insurance coverage. Overall, the share of workers in firms that offered coverage was constant over the period, at 90 percent. For workers in small firms (1-50 workers), where employers are less likely to offer coverage and where employers may be more likely to drop coverage under reform, we found no evidence that the share of workers in firms offering employer coverage dropped. In fact, the share of workers in small firms who were working for a firm that offered coverage actually increased slightly over the study period, from 72 percent in fall 2006 to 76 percent in fall 2007, although the difference is not statistically significant.

The study, which was based on a survey of employees not employers, also found that eligibility rules had not been tightened—not even for part-time workers or recent hires. Roughly 57 percent of both part-time workers and workers with less than a year of tenure on their current job reported that they were offered coverage through their job in both fall 2006 and fall 2007. Nor did the Massachusetts reform appear to lead to any spike in premiums, cost-shifting to workers or rollback in benefits.

This data is preliminary, covering only the first stage of reform, and the Massachusetts experiment must be monitored as it evolves. But the results are nevertheless reassuring.

The work was done by Sharon Long and Paul Masi of the Urban Institute, and was funded by the Robert Wood Johnson Foundation, the Blue Cross and Blue Shield of Massachusetts Foundation and The Commonwealth Fund.