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The Massachusetts Health Care Model: Expanded Coverage with a Heavy Burden on Working Families

Every Massachusetts resident will be required to have health insurance by July 2007 -- with a combination of governments subsidies, employer assessments and individual fines used to achieve that result under legislation which was approved by the Massachusetts House and Senate on Tuesday.

The Massachusetts plan will provide free health insurance to all families below the poverty line, and provide partial subsidies to those making between 100% and 300% of the poverty level to purchase health insurance. Starting in 2008, all individuals will be mandated by law to purchase insurance -- with penalties equal to half the cost of health insurance if they fail to do so. While the state House initially proposed that businesses not currently providing health insurance would pay a fee equivalent to 5-7% of their payrolls for the program, that amount was reduced to just $295 per employee during negotiations with the state Senate.

Extending health care coverage to 500,000 uninsured residents and increasing the subsidies for lower-income families is an important advance in policy. But as currently structured, the individual mandate to purchase health insurance puts an unfair burden on struggling working and middle class families. Individuals should not face tax penalties of up to $1000 to enforce such a mandate, even as irresponsible businesses that fail to provide health insurance are required to pay only $295 per employee.

The broad-based Affordable Care Today! (ACT!) coalition endorsed the bill, although with reservations. As key health care advocate John McDonough wrote on his blog, the law will expand affordable coverage for hundreds of thousands of state residents with better cost control systems for existing health plans, but will dump too much of the costs on individual workers, leave too many costs on employers who do provide insurance for their employees and put too little responsibility on employers who don't.

The core problem with the law was that Governor Mitt Romney, running for the Republican nomination in 2008, developed the individual mandate part of the plan in collaboration with the rightwing Heritage Foundation, including its health staffers, Bob Moffit and Ed Haislmaier. The explicit goal was to undercut progressive alternatives such as expanding Medicaid to cover more of the uninsured or having employers take more responsibility for covering their employees. And Romney is trying to pitch the passage of the Massachusetts bill -- including its heavy burden on working families through the individual mandate -- as undermining the case for covering the uninsured through expansions of Medicaid or Medicare. "The old single-payer canard is gone," crowed Romney.

With more employers dumping health benefits -- an increasing and disturbing trend -- working families are unlikely to be thanking Romney for sticking them with the bill while doing almost nothing to require employers to pay their fair share of the costs for health insurance. In the meantime, single payer advocates and advocates for employers paying their fair share of health costs won't be emulating Romney's harsh individual mandate model in other states.

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