NEWBURYPORT, MASS. - Three years ago, Rebeccah Pearson was just another carefree 20-something who had no medical insurance. Healthy and working a retail job in this pretty seaside city, she couldn't afford insurance, even if she had wanted it.

But when Massachusetts passed legislation in 2006 requiring all residents to buy coverage, she finally signed up. "I didn't want to get fined," she said. She went online to compare policies, mailed an application, and two weeks later had insurance for a subsidized premium of $34.60 per month.

Millions of other Americans could find themselves in Pearson's position if Congress passes the landmark health care legislation it is considering this fall. Massachusetts is the only state that has adopted the core elements of the plan outlined by President Obama and congressional Democrats: an individual mandate; an employer mandate; subsidies for the poor; insurance market reforms; and an "exchange," under which consumers can shop for coverage.

It's also the example that advocates and skeptics of those ideas use in arguing their case. Democrats highlight the expansion of coverage; about 97 percent of Massachusetts residents have insurance, compared with 85 percent nationally. Republicans, including Minnesota Gov. Tim Pawlenty, ding it for spending too much; Massachusetts had to scale back its coverage goals this year in the face of a big state budget deficit.

Health experts, meanwhile, consider it a useful laboratory to study the effects of revamping the health care system.

On the streets around Boston, many say the state's health care overhaul has changed their lives. Linda Furey, 41, a part-time librarian in Beverly, got new glasses. Steve Jackson, 48, a classical clarinetist, got his first physical in years, and learned that he had borderline high blood pressure and high cholesterol. He's now trying to eat less ice cream, cheese and butter.

Others remain caught in a coverage gap. Nearly 200,000 residents still lack insurance, many because they make too much to qualify for subsidies but too little to afford private coverage. They can get a "hardship exemption" from the state mandate, but they illustrate the challenge involved in providing affordable coverage to an entire population.

But, for the most part, the experiment is getting favorable reviews. A poll last year by the Harvard School of Public Health found that 69 percent of Massachusetts residents supported the health reform law, up from 61 percent just after it was enacted. The Kaiser Family Foundation, a nonpartisan research organization, concluded in a recent report that the state "has been a leader in demonstrating how a mixed public and private approach can achieve near-universal coverage."

Pearson's case was more dramatic than some. The retail manager, 32, was the sort of person who never got sick. Recently, she felt tired and moody. Armed with her new insurance card, she got an ultrasound, which revealed a cyst the size of a kiwifruit sitting on a fallopian tube. She had surgery to remove it. The cyst was benign, but if it had burst, she could have died.

But there are some things she doesn't like about the new law. She had to find new physicians because her family eye doctor and gynecologist didn't take Commonwealth Care, the state's subsidized plan.

But one thing she knows: "If I didn't have health insurance, I wouldn't have gone to the doctor. I wouldn't have found out what was wrong with me. I wouldn't have had the operation -- and things would have been really bad."

Growing pains

In three years, 180,000 people have enrolled in Commonwealth Care. An additional 148,000 have obtained coverage from their employers, despite early worries that the public program would "crowd out" private insurance. (Companies that have more than 10 employees incur an assessment if they don't offer health insurance.)

Add those who bought non-subsidized insurance or enrolled in Medicaid, and a total of 432,000 individuals in Massachusetts are newly insured.

Success in expanding coverage has brought its own problems: rising costs and longer waiting times.

A survey this year of 15 cities found Boston at or near the top for longest physician wait times. It took on average 63 days to see a family doctor there for a routine physical exam, compared with 10 days in Minneapolis and seven in Miami, according to Merritt Hawkins, a Texas physician recruitment firm. It said that wait times had lengthened in Boston, while falling in other markets.

To encourage more doctors to go into primary care, Massachusetts helps some doctors pay medical school loans.

State costs shot up too. Faced with a gaping state deficit, Gov. Deval Patrick recently backtracked on health benefits for thousands of green-card holders -- legal residents who are not citizens: They will now get medical care but not dental or vision coverage.

Yet talk of a financial crisis in Massachusetts frustrates local officials, who note that state budgets everywhere are in trouble. Overall costs went up, because more people enrolled in Commonwealth Care than expected, they said, but the cost per member is not higher than projected.

State spending on health care grew from $1.04 billion in 2006 to a projected $1.75 billion in 2010, an increase of $707 million, according to the Massachusetts Taxpayers Foundation, a nonprofit research group, which called the cost of reform "well within early projections."

Because half the new spending came from federal reimbursements, the state's share came to $353 million -- just 1 percent of its overall budget.

"That's a big lie, that it's not affordable," said Jon Kingsdale, head of the Commonwealth Health Insurance Connector Authority, the state's health insurance exchange.

"There [are] still lots of kinks and issues," said Phillip Gonzalez, director of grant-making at the Blue Cross and Blue Shield of Massachusetts Foundation. "But the reality is, we have insured more than 400,000 people, and many of these are the poorest and most vulnerable in the state."

Businesses at first opposed the employer mandate, but came around after penalties were watered down.

Richard Lord, president of the Associated Industries of Massachusetts, which represents the state's business community, says reform has gone smoothly, with one caveat. "What we've failed to do," Lord said, "is address the increasing cost of health insurance in any meaningful way."

Next: cost control

The next challenge is transforming the practice of medicine. People in Commonwealth Care are already taking better care of themselves, getting long-overdue physicals and eye exams, the Kaiser study found. Ironically, they're doing better than those on employer-sponsored coverage, who still struggle with high premiums, co-pays and deductibles.

Before the changes, at the busy South Cove Community Health Center in Boston's Chinatown area -- where Chinese and Vietnamese signs paper the walls -- 85 percent of patients were women and children. Now, men make up almost half of patients.

Next, officials want to tackle costs. They want to stop paying doctors for each procedure, which can spur overuse, and pay for outcomes -- that is, for keeping patients well.

As a result, providers are trying different strategies. Mount Auburn Hospital in Cambridge sends nurses to visit recently discharged patients in their homes, a bid to prevent the next hospitalization.

Atrius Health, a large multi-specialty group, is trying out group visits: one doctor sees several patients at once.

Atrius Chief Executive Dr. Gene Lindsey, a cardiologist, now meets with 10 patients at a time. It takes him an hour and a half, compared with three hours to see each individually. A transcriber, a medical assistant and a facilitator help out. Lindsey has found that exchanges are richer and patients learn from one another.

What critics don't understand, he said, is that reform doesn't end with universal coverage. It's like building a house.

"We've just put a basement in, and now we're walking around and we see there's a problem with where we wanted to put a bathroom. So we're having to change direction."

The work of health reform, he said, has just begun.

Chen May Yee • 612-673-7434