Health care is America’s most pressing domestic problem – especially for the estimated 45 million Americans who lack even basic health insurance. Now, an innovative plan in Massachusetts touted as providing near-universal health insurance is attracting national attention.
Gov. Mitt Romney is expected to sign the Massachusetts bill today, though he has signaled he will veto a section that would impose a $295 per employee annual fee on any business with 11 or more workers that does not provide health insurance.
Massachusetts already fares relatively well on the health insurance front, with just 10 percent of its residents lacking coverage, compared to a national average of 16 percent. Experts say that’s because the state has low unemployment and many employers who provide health coverage. The new plan hopes to bring 95 percent of Bay State residents under some form of health insurance, using a unique blend of carrots and sticks for individuals and employers alike as well as state and federal subsidies. Key elements include:
People who are able to afford private insurance will be required to buy it, just as motorists are required to buy automobile insurance. If they don’t, they would initially face tax penalties of at least $150 a year and ultimately would pay fines equal to half the cost of the cheapest policy the state thinks they should have bought – up to about $1,200 a year.
Individuals and businesses with 50 or fewer employees could buy insurance with pre-tax dollars, saving them as much as 25 percent of the cost.
People who earn less than the federal poverty threshold would be able to obtain subsidized policies that have no premiums. Smaller subsidies would be available for families earning up to three times the poverty level.
Insurance companies would be given incentives and subsidies to offer stripped- down plans at lower cost.
State planners hope that by requiring even healthy, low-risk residents to buy policies, they can encourage insurance companies to write more affordable policies at costs of perhaps $200 a month. That’s much lower than current rates in Massachusetts, where individual plans cost about $600 a month and $1,000 or more for a family.
The Massachusetts plan builds on both its already high insurance coverage and some programs already in place in the state and so may be hard to export to other states such as Colorado. But at a time when health care has become one of America’s most pressing domestic problems, it is a bold step that is sure to attract nationwide attention.
Health expenses are soaring across the United States, and ultimately, we favor a national solution to the insurance dilemma. But we admire Romney and Massachusetts for seeing the value of action at the state level.
