The new Massachusetts health coverage expansion program may be creating more hassles for the state’s low-income residents.

Alan Raymond, a health care finance consultant, describes that unfortunate side effect of the program in a report on progress and challenges 1 year after the Bay State started implementing the program.

The program is supposed to help uninsured Massachusetts residents by increasing enrollment in Medicaid for the lowest-income residents, helping other low-income residents by subsidized coverage, and requiring most residents to either obtain coverage from their employers or buy coverage through private insurers.

Massachusetts opened up the subsidized Commonwealth Care program for moderately low income residents in October 2006.

Enrollment in MassHealth, the Massachusetts Medicaid program, has increased by 53,000 since June 2006, Raymond writes in his report.

The Commonwealth Care program has reached about 54,000 previously uninsured residents with incomes between 100% and 200% of the federal poverty level, or about 90% of the residents believed to be in that category, in part because the state pays 100% of the premiums and enrolls those residents in the program automatically.

The Commonwealth Care program first opened to uninsured residents with incomes of 200% to 300% of the federal poverty level in January 2007. Those residents have to pay some of the cost of the subsidized health coverage themselves, and only 15,560, or about 19% of the residents believed to be in that category, have signed up for Commonwealth Care coverage, Raymond writes.

The Commonwealth Choice program, which will help higher-income residents buy unsubsidized private coverage, is set to start up July 1.

One challenge is that federal Medicaid rules required Massachusetts to use state employees to review the Commonwealth Care applications, Raymond writes.

Massachusetts put the MassHealth Medicaid program in charge of the Commonwealth Care enrollment.

“MassHealth has not, however, increased staffing at the MassHealth Enrollment Centers to accommodate the greatly increased volume, and this has resulted in reduced hours of phone operation and significant backlogs,” Raymond writes. “This critically affects the overall success of the program and could become even more problematic when the individual mandate takes effect.”