Another
Massachusetts Miracle?
Leif Wellington Haase, The
Century Foundation, 4/5/2006
Yesterday, the Massachusetts House and Senate
overwhelmingly passed a bill that would make the state the
first to require all residents to have health insurance
coverage. If signed by Governor Mitt Romney and successfully
implemented, the Bay State could be the first U.S. state to
achieve near-universal coverage. (Hawaii has a universal
access law and employer coverage mandate on the books, but
hasnt come close to getting all its residents covered.)
The bills passage, which happened with stunning speed,
boosts tremendously the cause of national universal health
insurance coverage. As Governor Romneywhose presidential
aspirations, not incidentally, also got a boostrightly
pointed out, it helps trump the perception that universal
coverage must go hand in hand with big tax hikes and big
government expansions. This perception (though substantially
false) helped sink the Clinton plan. The Massachusetts bill
calls for just $125 million in new state spending and finances
the program through a combination of federal reimbursements,
payments by employers who dont offer coverage, and new
premiums or tax assessments from individuals who could afford
coverage but choose not to buy it.
Even more impressive than the plans intricate financing is
the consensus, even if it proves short-lived, among
legislators, health industry, and public advocacy groups that
the bill is worthwhile. The head of the Massachusetts group
that has promoted the main single-payer alternative to this
approach called it an important, meaningful step forward.E
The CEO of Tufts Health Plan, one of the states biggest
insurers, said that the bill was definitely a major advance.E
To be sure, Tufts and other insurers stand to gain members
through new subsidized insurance plans, and big employers
wont have to pay a steep payroll tax if they dont offer
coverage. But even though industry lobbyists and health reform
advocacy groups lobbied fiercely on behalf of their respective
plans, they were willing to compromise on a good alternative
that pleases no one completely. At least for the moment,
getting care to those who need it took precedence over
ideology. Such
flexibility needs to carry over to a national debate.
Perhaps it will.
Policy types are salivating over seeing how several key
features of this type work in practice. For instance, a number
of analysts (including this
author) have recommended that individual mandates and a
government agency that oversees and works directly with
private health plans (this umpires role is called the
Connector in this bill) be prominent features of a workable
national plan. These ideas now exist mainly on paper and not
in real life, but they are well worth trying.
Those are the headlines, heres the fine print.
Massachusetts has several features that are very advantageous
to reaching universal coverage. These will be hard to
replicate in many states. The state has very high rates of
public and private coverage and one of the lowest percentages
of uninsured residents in the country. Just over 11 percent of
the states residents now lack coverage, compared with over 16
percent nationwide and as high as 25 percent in some states.
Rates of private coverage in Massachusetts also substantially
exceed the national average. Almost two-thirds of employers
offer health insurance to their employers, compared with 56
percent nationally. With fewer people outside the existing
system, the costs of getting to universal coverage are more
modest.
It remains to be seen if employers will stay on board if
health care costs continue to go up and the costs of covering
employees or paying penalties rise. Many employers continue to
complain that the bill does little to contain the cost of
care. This could be a huge red flag. For the moment, Romney is
finessing the issue by saying that the pay or playE
provisions will affect relatively few employers, and that he
will veto any effort to make employers pay a larger share. But
if employers start dropping coverage or if the financing seems
to falter, this issue will be revisited early and often.
Ambitious state health reform efforts have foundered in the
past because state revenues fluctuate significantly from year
to year, and states cannot readily run budget deficits to
smooth over ups and downs in the revenue cycle. In 1988, the
Massachusetts legislature actually passed another universal
coverage plan that never materialized because it was never
funded. (Some of the public health program expansions that
survived this truncated legislation were building blocks for
the current reforms.) Uncertainty over sustained revenue
streams is one of several reasonsthe constraints of federal
ERISA laws on seeking employer mandates is anotherwhy it
would be hard to reach universal coverage nationwide on a
state-by-state basis. Massachusetts may prove to be no
exception. As Eileen McNamara correctly
notes in the BostonGlobe, without an earmarked
source of revenue the promise to subsidize care for the poora
critical element of the planeasily could fall prey to annual
budget politics.
However, these concerns pale in comparison to the main
take-home message. Massachusetts brings to national attention
a vital trendstate leadership on health care reformthat
hasnt gotten enough front-page play. Inside the Beltway,
leaders express gloom about the prospects for comprehensive
reform and dither over relative minutiae such as annual
Medicare payment updates to providers. From Massachusetts to
Illinois (Healthy Kids) to Maine (Dirigo health plan) state
legislators are implementing actual legislation that moves
toward universal coverage. Its time for these smaller steps
to galvanize a national debate.
Leif Wellington Haase is a senior program officer and
Health Care Fellow at The Century Foundation.