All eyes are on Massachusetts' health plan
Monday, April 17, 2006 7:32 AM PDT
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E-mail this articleMassachusetts' new plan for universal health coverage is being hailed as a model for other states. We'll wait and see if the legislation signed into law last week by Republican Gov. Mitt Romney in fact results in health insurance coverage for virtually every citizen in the state by July 2007, as promised. There are reasons to think this "model" could lose some of its appeal in the months ahead. The cost of this initiative, both for businesses and the state, is far from certain.
Still, Romney and the state's heavily Democratic Legislature deserve credit for an innovative and bipartisan effort to solve what is perhaps the toughest domestic issue before us. They've taken a very direct approach -- essentially requiring citizens to have health insurance.
The law will use a combination of subsidies and escalating tax penalties to make health insurance more affordable and to force citizens to purchase it, according to Associated Press writer Steve LeBlanc. Companies employing 11 workers or more would be required to offer health benefits or pay penalties. Free or heavily subsidized health coverage would be available for poor and low-income citizens.
The plan is estimated to cost more than $300 million in the first year and rise to more than $1 billion by the third year. Its architects maintain that most of the cost will be covered by existing state spending on health care and federal reimbursements.
It's an intriguing program, but we seriously doubt that it will become a model for this or most other states to follow. As many observers were quick to note last week, Massachusetts is something of special case. For one, the state has a very low number of uninsured. Also, the average income of its citizens is very high.
In any event, the Massachusetts mandate is no substitute for comprehensive health-care reform. It does nothing to address the underlying problem -- the soaring cost of medical care. This is why we can reasonably sure that the cost estimates for this plan will turn out to be much too low. The average annual premium for employer-sponsored family coverage topped $14,500 last year, more than double what it was in 2001.
Insurance costs will continue to rise, regardless of tax penalties and the like, absent fundamental, system-wide reform. That can be accomplished only at the federal level. But Congress remains either unable or unwilling to tackle broad-based health-care reform. This political paralysis has left the states little choice but to strike out on their own, as Massachusetts has done.
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