Academic journal article The Hastings Center Report

Prices of Equitable Access: The New Massachusetts Health Insurance Law

Academic journal article The Hastings Center Report

Prices of Equitable Access: The New Massachusetts Health Insurance Law

Article excerpt

Prices of Equitable Access: The New Massachusetts Health Insurance Law

For decades, the United States has remained the only industrial democracy without universal entitlement to health care. On April 21, 1988, Governor Michael Dukakis signed a universal health insurance bill making Massachusetts the first state to promise health insurance to all citizens, and the second (after Hawaii) to require employers to offer insurance to workers. [1]

How did Massachussets pass a law that has proven so elusive nationally? What are its main provisions? Will the new law be phased in successfully or will high costs ultimately block introduction of universal access? Will the Massachusetts legislation demonstrate to the nation the financial feasibility of equal access to care or instead convince others that such access provisions are unaffordable?

Answering these questions will require careful monitoring and evaluation over at least the next five years. [2] However, analyzing the direction and power of the forces that impelled the new bill into law can inform projections about its trajectory. These forces include Massachusetts politics, economics, and health care; the specific evolution of health policy in the Commonwealth over the last decade; and the perspectives and power of interested parties.

Forces Shaping the Law

Economics, Politics and Health Services. Massachusetts currently spends much more money to provide health care to a slightly greater insured population than the national average. In 1986, the state ranked first in the nation in both hospital spending per capita and in physician-to-production ratio. [3] Massachusetts ranked thirteennth in proportion of its population with health insurance in 1985, with about 13.1 percent of the population under age 65 uninsured, a figure one-quarter below the national average. Yet despite health spending that is 20 to 25 percent per capita above the national average, Massachusetts currently devotes a lower-than-average share of gross state product to health care, as its per capita product is as high as 40 percent above the national average. [4]

A vigorous state economy has smoothed the path of those who would devote more money to public purposes. In recent years, Massachusetts's economy has grown much faster than that of the nation as a whole. For four years, the unemployment rate has been the lowest among industrial states. These factors have enabled Massachusetts to collect considerably more in state and local taxes per capita without exceeding the average national tax burden. [5]

In the fall of 1986, a nonbinding Massachusetts referendum calling for a comprehensive national health program was approved by two-thirds of the voters. The following spring, a survey indicated a willingness among 80 percent of the respondents to pay higher state taxes in order to finance universal access. [6] This declared support for improved health care access coexists with two Massachusetts laws passed by referenda in this decade to limit growth in both state and local taxes.

Although universal health insurance has enjoyed broad appeal in Massachusetts, this has not translated smoothly into political support in the legislature. Business, especially small business, has feared its costs; labor support has not been enthusiastic. Many legislators have worried about higher financial burdens on state government, especially if the economy were to enter a recession. Various individuals desiring universal access have feared that its costs, combined with higher spending for alreadey insured patients, would be very expensive in the absence of reform in hospital payment mechanisms. However, hospital lobbying has blocked consideration of any such reform.

Health Policy: Cost Control, Access, and Competition. Since the 1970s, increasing health costs, and high hospital costs in particular, have prompted a number of regulatory responses in Massachusetts. …

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