GUEST VIEW: Massachusetts Has Its Chance for Medicare for All…
The Massachusetts Joint Committee on Health Care Financing is planning a virtual public hearing to receive testimony on “An Act Establishing Medicare for All in Massachusetts”, Senate Bill.766 and House Bill.1267. This bill guarantees universal health care access through a single payer health care financing system, the Massachusetts Health Care Trust.
This Trust would be formed and governed by a Board of Trustees with 29 members, including patients and medical experts, that will establish policies, regulatory standards and oversee administrative procedures. Once fully implemented, the Massachusetts Health Care Trust would cover all medically necessary services (i.e., doctor, hospital, long-term care, early screenings and other preventive measures, mental health, reproductive health care, dental, vision, prescription drug and medical supplies). The Trust replaces the current expensive, complicated multi-insurance system.
Massachusetts has a history of innovation in health care insurance reform serving as a model for implementing the Affordable Care Act after its passage in 2010 and restructuring Medicaid in 2018. However, the successes in the coverage expansion of these reforms did not translate into cost-containment because the multi-insurance system requires expensive administrative operations. While these extra costs are automatically built into the insurance premiums, they are no longer sustainable for the budgets of patients and their employers, including municipal and state government agencies.
Research from different parts of the United States has consistently shown that a single payer health care financing system would produce substantial savings in money and lives. According to UMass Economics Professor Gerald Friedman, the proposed Massachusetts Health Care Trust Fund would save 30% of our current spending on health care in the state ($34 Billion). He estimates the Trust Fund can eliminate administrative waste in the commercial health insurance market, gain savings by using Medicare reimbursement rates, and negotiate lower price for prescription drugs and medical devices.
The financing of the Massachusetts Health Care Trust Fund would include the current funding from federal and state government (e.g., Medicare, Medicaid, and other programs), and replace the current insurance premiums, co-pays, deductibles, and other out-of-pocket payments with a tax system to be applied as (1) a payroll tax on employers with 100 or more employees (7.5% +.5%), (2) an employees’ tax (2.5%), (3) a tax on the self-employed (10% after an exemption of $20,000 on their salaries and wages), and (4) an unearned income (10% after an exemption of $20,000 in payments of dividends, interests or gifts). Additional details and economic analysis here.
The important conclusion is that most people’s tax contribution to the Trust Fund would be less than what they spend now on insurance premiums and out-of-pocket payments expenses. This is certainly the case for the families of the chronically ill patients requiring expensive medications and medical supplies. Income from Social Security, pensions, or unemployment benefits will not be taxed. In short, the savings for all current contributors to the health insurance premiums (state and municipal government, businesses, and families) make the Trust Fund a worthwhile alternative.
Another reason to support the Massachusetts Health Care Trust Fund is its potential impact on health disparities. Despite enjoying one of the highest levels of health insurance coverage in the country, Massachusetts could not make significant progress in the elimination of health care disparities. Those with limited coverage and high deductibles are more likely to avoid preventive care, such as cancer screening, and to delay care until their conditions become severe, requiring more aggressive and expensive treatment.
The unequal burden experienced by racial and ethnic minorities is observed in their poorer health outcomes, high levels of disability, and premature death. Different from the single payer health care financing system in Canada and some European countries, the Massachusetts Trust Fund system would have no out-of-pocket cost to the patient, facilitating universal access regardless of the ability to pay for needed care. A more equitable system brings hope for healthier, longer, and happier lives for all.
The Joint Committee on Health Care Financing has a unique opportunity to move forward the bill that offers an alternative model to contain health care spending. Building on the lessons learned and expertise from previous reforms, Massachusetts is well positioned to take another step forward in persuading an equitable and cost-effective solution to the rising costs of health care.
Readers who are planning to submit written testimony can send it by email to the Joint Committee Co Chairs Rep John Lawn and Senator Cindy Friedman, and the Committee Director. The public hearing is October 26 at 11am.
ABOUT THE AUTHORS:
Maria Idalí Torres is a retired applied public health anthropologist and former director of the Gastón Institute in UMass-Boston and Dean Robinson, an Associate Professor of Political Science, and Interim Chair of the W. E. B. Du Bois Department of Afro-American Studies in UMass-Amherst.