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International

Massachusetts has new plan to fund healthcare

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 unprotected.

“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 different pieces.”

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 health insurance.

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.

 

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