Dukakis Signs Universal Health-Care Bill : Massachusetts Is First State to Provide Basic Insurance for All

In a festive outdoor ceremony, Massachusetts Gov. Michael S. Dukakis, leading contender for the Democratic presidential nomination, Thursday signed into law the nation’s first legislation providing basic health insurance for all residents of a state.

“We have good reason to rejoice today,” Dukakis told a lunchtime crowd of several hundred people jammed onto the Statehouse steps, “as we once again become the nation’s laboratory, the nation’s pathfinder--blazing a trail that leads to affordable, quality health care for every man, woman and child in this commonwealth.”

The law which will be phased into full effect by 1992 is aimed at the 600,000 uninsured people among the 6 million residents of the state. But in this election year, its impact extends well beyond the state borders, becoming a yardstick for measuring a potential Dukakis presidency.

“What we do here today can and must be done all over the United States of America,” Dukakis told supporters Thursday.

Draws Mixed Reviews

Backers of the measure hail it as a model for national health insurance, while opponents warn that it could wreak financial havoc.

Beginning in 1992, all companies that employ six or more people will be required to provide health insurance for those employees. Those that do not will have to pay annually about $1,680 per employee into a state-administered insurance fund, from which uninsured people will be able to buy insurance on a sliding scale, paying 25% to 30% of the insurance cost.

The state-sponsored fund will be open to the unemployed as well. Those too poor to pay the insurance premium would be eligible for state Medicaid coverage.

Dukakis said the legislation will cost Massachusetts $622 million over the next four years. However, analysts for the state House Ways and Means Committee say the cost will range from $924 million to $1.4 billion. Part of the state’s expense comes from the fact that, until everyone is guaranteed insurance in 1992, the state must pay into an “uncompensated care pool,” which pays hospitals when they cannot collect for care provided to indigent people.

Cost Containment Planned

As a trade-off for this new expense, hospital cost containment measures will be initiated, limiting rate increases, setting caps on the amount of money funneled to hospitals from the uncompensated care pool, and pressuring unneeded institutions to close or convert to other community uses.

“A certain compassion” and “a deep commitment to quality of life” became evident in Dukakis as he steered the bill through the Massachusetts Legislature, said Karen Davis, chairman of the department of health policy and management at Johns Hopkins University’s School of Public Health and an assistant secretary of health and human services in the Jimmy Carter Administration.

“He showed me that he is single-minded in a certain sense,” said Robert Restuccia of Health Care for All, an 80-group consumer coalition. “He was hard to convince, but once he became convinced he was a strong advocate.”

Dr. William M. McDermott, executive director of the Massachusetts Medical Society, praised the new law, saying the organization “shares the social conscience” that the measure demonstrates.

However, state Rep. John H. Flood, Democratic chairman of the Legislature’s House Committee on Taxation, accused Dukakis of playing “good-time politics” here to look good in the Democratic primaries. “If he approaches public policy in Washington (as President) the way he approached (the state bill) you’re looking at major taxes.”

Dukakis and his aides “fully intend to be across the Potomac when this (state deficit stemming from the program) hits the fan,” he said.

“Here’s the guy who’s touting small business,” he said of Dukakis, “but here’s a bill that will devastate small business.”

Added Cost to Businesses

Richard Mastrangelo, vice president of Associated Industries of Massachusetts, said the new legislation “sends a negative signal to corporate investors about investment in Massachusetts” because it amounts to “another cost of doing business” in the state.

Executives of small firms have been busy clicking their calculators, trying to figure how much the law will cost them.

Garson Fields, president of Berkshire Electric Cable Co. in Leeds, Mass., foresees a “dramatically increased cost in labor” at his 100-employee firm.

To illustrate his point, he figured that at $1,680 a year, an uninsured part-time employee would cost him an extra $32.30 a week. “That means we can’t afford to have less sophisticated jobs done by part-time people anymore,” Fields said. “We happen to be in a big competitive marketplace, and if I’m bidding against someone from out of state who isn’t struggling with this, I can’t compete with him.”

But proponents of national health insurance legislation, as well as similar state bills, have taken heart from the enactment of the Massachusetts plan.

According to Robert M. Brandon of the Washington office of Citizen Action, a consumer lobbying organization, a dozen other states are considering some form of universal health insurance.

In California a private health-care coalition is advocating a plan called “Baby-Cal,” which would cover 60,000 pregnant women and 500,000 children under age 5 currently without insurance.

Of state laws already on the books, only Hawaii’s comes close to the Massachusetts legislation. The Hawaii law requires employers to insure workers but does not cover unemployed people.

Federal Bill Awaits Vote

National health-care legislation sponsored by Sen. Edward M. Kennedy (D-Mass.) and Rep. Henry A. Waxman (D-Los Angeles), now awaiting a floor vote, would cover about 22 million of the estimated 40 million uninsured working Americans. The national legislation exempts businesses with 10 or fewer employees, and workers would pay 20% of the cost.

At Dukakis’ campaign headquarters here, Christopher L. Georges, an aide specializing in health issues, said that while the campaign will “take the principles from the bill and go on to the rest of the country,” Dukakis realizes that “it can’t be done overnight.”

The strategy, Georges said, will be to use the current bill before Congress as “a first step,” and then seeking additional legislation to extend health insurance to non-working people as well.

Davis of Johns Hopkins said a President Dukakis also would have timing on his side. “There is growing evidence of a consensus that (40 million uninsured Americans) are an embarrassment to this country.”