The Massachusetts state government reported this week that nearly half a million people signed up for health insurance in the two years since Massachusetts enacted a new law requiring all residents to have health insurance or face penalties.

The plan provides free health insurance to those making less than $9,800 a year, and subsidizes costs for those making more than that but less than $30,000 per year. Employers with 11 or more full-time employees have to pay at least one-third of full-time workers' premiums and ensure that at least 25 percent of their full-time workers are covered by an employer plan. 

Massachusetts Governor Deval Patrick couldn't be happier over the progress he's seen to date.

"To have insured nearly a half-million people in less than two years is nothing short of remarkable," said Gov. Patrick.

But not everyone thinks this is good news. Moody's Investors Service reported yesterday that the costs of the Mass insurance program is rising at an unsustainable rate. 

"Costs related to the commonwealth's 2007 health-care reforms are increasing far more rapidly than initially projected," said Moody's.

Indeed, the state's subsidized health insurance plan is projected to rise 41 percent from the last fiscal year to the current fiscal year and will reach $869 million in annual costs, Moody's said in a report.

Don't dismiss the program as a failure just yet. The state also reported a financial upside to the insurance saga. Emergency room visits have dropped by 44 percent, eliminating high cost medical care and saving the state an estimated $68 million this year.

The fate of the Mass experiment may be pinned to support from Washington. As the Boston Globe reports, "the economics of the ambitious campaign remains uncertain. Massachusetts is locked in delicate negotiations with federal authorities to determine if the state will continue getting billions of dollars in special assistance to help make the experiment work."

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