‘Massachusetts Has You Covered’ : Bay State’s Health Plan Could Serve as a California Model

The rhetoric about safety nets is empty: 37 million Americans are without health insurance. This is more than 17% of the non-elderly population. Most of the uninsured work or are dependents of workers. The demographics in California are worse: 21% of the state’s non-elderly are without health insurance, and 80% of them are working and could be covered by their employers if insurance options were available and affordable. It appears that employment is no guarantee of a basic necessity: health insurance.

Like many national health and social issues, this problem has been aggravated by the Reagan Administration and shunted aside. As with the national debt, someone else will have to repair the damage: an-other generation, another Administration, another level of government.

If California cannot look to the federal government for solutions, it will have to start by looking to other states. This brief search ends with Hawaii’s employee coverage program and Massachusetts’ Health Security Act.

Of the two plans, Massachusetts’ is receiving more attention because it covers a large industrial state, it promises to offer all the state’s residents health insurance and its primary sponsor is Michael S. Dukakis. What, if anything, does Massachusetts’ Health Security Act mean for anyone out-side that state?

The law is the product of six years of work. It is the third piece of legislation passed in Massachusetts in this decade that combines care for the uninsured with cost-containment and hospital reimbursement. The major addition of the Health Security Act is that it mandates that employers must pay a minimum amount toward each employee’s health insurance.

By 1992 everyone in every possible situation will be able to purchase coverage. Premiums will be adjusted to the purchaser’s income and subsidized by the state and employers. The self-employed, workers in small or large businesses, students, the unemployed, mothers, children and the disabled will be matched with an insurance offering. In the parlance of a major insurance company, “Massachusetts has you covered.”

The few compulsory aspects of the law apply to employers and hospitals. Employers with six or more employees will be required to pay $1,680 per employee for insurance provided by the employer or made available through the state. Employers and hospitals will also pay a much smaller tax dedicated for the uninsured.

At this point you may ask: What uninsured?

The law does not require anyone to accept or pay for health insurance. The freedom not to choose insurance, of course, does not protect the uninsured from car accidents or heart attacks. They will still appear in emergency rooms and still require care. In order to pay for the inevitable, Massachusetts will finance a special hospital fund for the uninsured. This fund has existed in the state since 1982, but if it had not been in place the state would have had to create it. A voluntary universal program cannot be filled with holes.

Universal health insurance conjures up images of revolutionary change and socialized medicine. That is not the case in Massachusetts. While promoting managed care and promising to create a more competitive environment, the law actually enshrines the existing health-delivery system in all its fragmented and inefficient glory.

Employers will maintain the right to preserve their health-benefits program. Individuals will maintain their right to choose coverage. Private insurance companies will maintain their lines of business and underwrite the new business created by the state. And, despite encouraging health-maintenance organizations and offering incentives to eliminate unnecessary hospital beds, this law will allow providers to continue doing business as usual.

Hospitals have received a special blessing from this legislation. Under the guiseof cost containment, the hospitals will receive hundreds of millions of dollars for bad debt and for charity care over the next four years. In a rather bizarre arrange-ment the state will reimburse hospitals up to $70 million a year if payments from federally financed Medicare fail to keep up with inflation.

The law isn’t pretty, but it does promise to eradicate medical indigence in Massachusetts.

California can draw one important lesson from all this.

Universal health insurance is not created overnight. The Massachusetts plan was actually a moderate shift in the state’s treatment of health providers, the uninsured and business. It is unreasonable to believe that it could be replicated in its entirety in California or any other state.

Each state must work within its own context to construct a gradual process for the extending of health insurance to its citizens. On one level, Massachusetts should be regarded as a smorgasbord of possibilities with only selected aspects suitable to the West Coast. On another level, Massachusetts is proof that a state does not have to ignore scandalous gaps in health insurance. Belief in the possibility of a solution is Massachusetts’ major contribution.