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Massachusetts Announces Universal Healthcare Plan

April 5, 2006 at 12:00 AM EDT
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JIM LEHRER: Massachusetts’ big move toward universal health care. Our health correspondent, Susan Dentzer, is here with the latest.

Susan, welcome.

SUSAN DENTZER, NewsHour Health Correspondent: Thanks, Jim.

JIM LEHRER: How is this development being viewed today in the larger world of health care?

SUSAN DENTZER: As a very interesting and very significant move, Jim. If we look at the national context, which is how most people in the broader world are viewing this, we know that our private-and-public combination health insurance system is slowly crumbling.

We know that, for example, private firms are dropping coverage right and left. Just in the past five years, we’ve gone from 69 percent of firms offering coverage to their workers to 60 percent. So a 9 percentage point drop in just five years is quite significant.

Most of this coming as small businesses get out of the business of offering health coverage. Why? Because health coverage is getting more and more expensive. Health insurance premiums have gone up more than 70 percent, again in just the past five years.

We know more and more people are going on public coverage, at least eight million people on Medicaid in the last four years. And on top of that, we have 46 million Americans uninsured, a record level, and…

JIM LEHRER: And that keeps going up, too.

SUSAN DENTZER: And that keeps going up. That’s just a 2004 number. So in that context, people say…

JIM LEHRER: Here comes Massachusetts.

SUSAN DENTZER: … here comes Massachusetts, to not only move in, push towards universal coverage, but also push to lower the cost of health care coverage, or at least hold the line on the cost of health care coverage, so a very significant move.

99 % would receive healthcare insurance

JIM LEHRER: We’ll go to the specifics in a minute, but when it’s all said and done, is this Massachusetts plan aimed at literally having everybody in Massachusetts have a health insurance plan of some kind?

SUSAN DENTZER: If everything works as it’s planned — and it’s a big if, because there’s lots of details yet to be decided upon — 99 percent of people in Massachusetts would have health coverage.

JIM LEHRER: Give us a short course then now on how they get there.

SUSAN DENTZER: Three major parts. One is: What do people have to do to have a different system than we have now? There’s always been debate about, do you have to make people do things? Do you have to make employers provide coverage? Do you have to make individuals buy it? Most states, even the nation, in the health care reform has said, no, we’re not going to make anybody do anything.

LEHRER: Can’t do that, yes.

SUSAN DENTZER: Massachusetts said, uh-uh, we have to stop this notion that it’s going to happen voluntarily. So individuals, for the first time — apparently, it is the first time anybody has ever proposed in a state that there be a requirement that individuals have coverage, just like auto insurance. But that’s exactly what Massachusetts is going to do.

JIM LEHRER: And they follow the kind of the auto insurance plan — I mean, model here, right?

SUSAN DENTZER: Exactly. As of 2007, individuals, if they can afford it — and that’s another “if” that’s going to have to be delineated further — but if they can afford it, individuals are going to have to buy coverage. And if not, they’ll essentially have to pay more in state income tax to compensate for that.

And similarly, do employers have to do anything? Massachusetts says, yes, employers must offer coverage to their workers. They must offer a reasonable contribution to that. Yet to be determined what “reasonable” is, but that’s the way it’s going to operate.

And if they don’t, they’re going to have to pay a head tax of $295 per employee who is not covered into a pool that will help to provide coverage for others. So that’s point number one.

Another very important part of this, though, is that Massachusetts said the health insurance market, as it is structured now, doesn’t work; we need something to organize it better, particularly for uninsured people. So they’re creating it…

JIM LEHRER: So the poor people who can’t afford it or don’t have jobs where employers provide it, right?

SUSAN DENTZER: Or working individuals often who can’t afford it.

LEHRER: Working individuals, all right. OK.

SUSAN DENTZER: So let’s create what they’re calling the insurance market connector. It’s essentially going to be a public authority that will come in and organize the new market with new health insurance products that will be theoretically lower cost and also, in essence, provide a way for employers to say yes.

JIM LEHRER: It will essentially replace the private companies…

SUSAN DENTZER: No, it will…

LEHRER: … or organize the private companies?

SUSAN DENTZER: It will be on top of what is already provided by private companies currently through insurance mechanisms. It’s going to be a new way of aggregating dollars, really, to provide insurance for people who don’t have it.

And the third important piece is the money to do all of this, because obviously bringing more people into the system is going to cost. There is some new state dollars going to be put into this, but more important what it does is take some existing federal dollars that come in through Medicaid that now go directly to hospitals to help them pay for the uninsured. That’s going to be recycled into providing subsidies to cover some of the people who are not insured now.

Put those three things together; you have the Massachusetts plan.

JIM LEHRER: Is there any other state even considering something like this or is this truly landmark? Is this truly out there by itself?

SUSAN DENTZER: This is out there by itself at the moment. Other states have done different things. Maryland, as we know, just passed in January a law that would compel the largest employers, of 10,000 workers or more, to provide coverage. It essentially was aimed at Wal-Mart.

JIM LEHRER: But that’s not as inclusive as this.

SUSAN DENTZER: But that’s not as inclusive as this. And other states that have come in and required employers to provide coverage — California tried to do that a couple of years ago; Vermont tried to do that — those have been either overturned by the voters or, in Vermont’s case, overturned by the governor. So this is new.

JIM LEHRER: OK. In the political part of this, is it possible to say what Massachusetts has come up with is a liberal solution, or a conservative solution, or some kind of hybrid?

SUSAN DENTZER: It’s a hybrid. It’s very much a bipartisan plan. The Massachusetts legislature is overwhelmingly Democratic and this passed overwhelmingly. There was nobody voting against it in the Senate and only two dissenting votes in the House.

But there’s also a Republican governor, Mitt Romney. And this would not have happened without his input. He was pushing very hard on the individual mandate, on this notion of individuals must be responsible. That hasn’t usually been the liberal tact. Liberals are usually arguing that businesses have to be responsible.

So what you had was a blend where the notion of having employers be responsible, having individuals be responsible, all came together. And also, in fact, a lot of the business community was supportive, as well as the health care community, which obviously was going to be impacted by this.

JIM LEHRER: Is there something unique about Massachusetts that this will only work in Massachusetts? Or what do the experts tell you today about whether or not this is transferable to some other state?

SUSAN DENTZER: Well, that, of course, is the huge question. Those in Massachusetts say, as Massachusetts goes, so goes the nation in health insurance terms.

They look back on, say, a decision in 1996 that Massachusetts made to cover children in the state. And that, they say, led to the passage of the state children’s health insurance program at the federal level.

Similarly, they say that we’re lighting a fire here in Massachusetts that’s going to spread across the country. We’ll see.

JIM LEHRER: In a word, is this a done deal in Massachusetts? The legislature signed off. The governor said he’s going to sign it. It’s going to happen, right?

SUSAN DENTZER: The governor says he’s going to sign it, although the governor doesn’t really love the fee on businesses, the head tax on businesses if they don’t provide coverage. He says he’s going to tinker with that, but the legislature says it will override that if the governor does. So that is yet to be seen how that plays out.

Also, there are lots of details ahead that will have to be worked out in the regulatory process. When do you call people — when do you say people have to be subject to the individual mandate?

JIM LEHRER: Where do you cut the all kinds of caps, and qualifiers, and all that sort of stuff? OK.

SUSAN DENTZER: So it’s a work in progress in that respect, but the rest of it…

(CROSSTALK)

JIM LEHRER: Conceptually, it’s there.

SUSAN DENTZER: Yes.

JIM LEHRER: OK. Thank you very much, Susan.

SUSAN DENTZER: Thanks, Jim.