Massachusetts has new plan to fund
BOSTON – Massachusetts passed a bill earlier this month that positions
it become the first U.S. state to provide universal healthcare coverage.
The bill is said to provide a mechanism for all Massachusetts citizens
to obtain health insurance. It combines methods and proposals from
across the political spectrum, spreading the cost among businesses,
individuals and the government.
As reported in the New York Times, “This is probably about as close as
you can get to universal,” said Paul B. Ginsburg, president of the
nonpartisan Center for Studying Health System Change in Washington.
“It’s definitely going to be inspiring to other states about how there
was this compromise. They found a way to get to a major expansion of
coverage that people could agree on. For a conservative Republican, this
is individual responsibility. For a Democrat, this is government helping
those that need help.”
The bill, the product of months of wrangling between legislators and the
governor, Mitt Romney, requires all Massachusetts residents to obtain
health coverage by July 1, 2007.
Individuals who can afford private insurance will be penalized on their
state income taxes if they do not purchase it. Government subsidies to
private insurance plans will allow more of the working poor to buy
insurance and will expand the number of children who are eligible for
free coverage. Businesses with more than 10 workers that do not provide
insurance will be assessed up to $295 per employee per year.
All told, the plan is expected to cover 515,000 uninsured people within
three years, about 95 percent of the state’s uninsured population,
legislators said, leaving less than 1 percent of the population
“It is not a typical Massachusetts-Taxachusetts, oh-just-crazy-liberal
plan,” said Stuart H. Altman, a professor of health policy at Brandeis
University. “It isn’t that at all. It is a pretty moderate approach, and
that’s what’s impressive about it. It tried to borrow and blend a lot of
Many states, including Massachusetts, have been wrestling for years with
how to cover the uninsured, and several states have come close,
according to the National Conference of State Legislatures. Hawaii
passed a universal access law in 1974 requiring employers to offer
healthcare coverage for employees working 20 hours or more a week, but
nearly 10 percent of people remain uncovered. Efforts to cover all
citizens in Minnesota and Vermont in 1992 and in Massachusetts in 1988
fell flat in the mid-1990s when the language in the bills concerning
universal coverage was repealed.
In 2003, Maine enacted a law that significantly broadened insurance
coverage and combined employer payments with expanded government
programs. That year, California enacted a law that required employer
contributions, but it was repealed in a referendum in 2004.
Massachusetts would be the first state to require its citizens to have
The Massachusetts bill creates a sliding scale of affordability ranging
from people who can afford insurance outright to those who cannot afford
it at all. About 215,000 people will be covered by allowing individuals
and businesses with 50 or fewer employees to buy insurance with pretax
dollars, and by giving insurance companies incentives to offer
stripped-down plans at lower cost. Lower-cost basic plans will be
available to people ages 19 to 26.
Subsidies for other private plans will be available for people with
incomes at or below 300 percent of the poverty level. Children in those
families will be eligible for free coverage through Medicaid, an
expansion of the current system.
The Massachusetts bill was hammered out with proposals and input from
state Democratic legislators; Mr. Romney, a Republican; Senator Edward
M. Kennedy, a Democrat; insurers; academics; businesses; hospitals; and
advocates for the poor, including religious leaders.
They were motivated in part by a threat by the federal government to
eliminate $385 million in federal Medicaid money unless the state
reduced the number of uninsured people.