Despite a stirring scene in the Massachusetts State House Rotunda declaring victory in the fight for universal health coverage, the state’s new health reform legislation sets the stage for disaster.
The bill
The new bill includes three provisions meant to expand coverage. First, it would modestly expand Medicaid eligibility. Second, it would offer subsidies for the purchase of private coverage to low-income individuals and families. Finally, those making more than three times the poverty income (about $30,000 for a single person) would have to buy their own coverage or pay a fine.
A new state agency will connect people with the private insurance plans that sell the coverage, and allow people to use pre-tax dollars to purchase coverage (a tax break that mostly helps affluent tax payers who are in high tax brackets).
Businesses that employ more than 10 people and fail to provide health insurance will be assessed a fee (not more than $295) to help subsidize care.
What’s wrong here
The linchpin of the plan is the false assumption that uninsured people will be able to find affordable health plans. A typical group policy in Massachusetts costs about $4,500 annually for an individual and more than $11,000 for family coverage. Few of the 748,000 uninsured in Massachusetts are young enough (under age 35) to qualify for low-premium plans. Fewer are affluent enough to readily afford them.
The legislation promises that the uninsured will be offered comprehensive, affordable private health plans. But the only way to get cheaper plans is to strip down the coverage, boost co-payments, deductibles, uncovered services, etc.
Hence, the requirement that most of the uninsured purchase coverage will either require them to pay money they don’t have, or buy nearly worthless stripped-down policies that represent coverage in name only.
The legislation will do nothing to contain the skyrocketing costs of care in Massachusetts, already the highest in the world. As rising costs force more and more employers to drop coverage, state coffers will be drained by the continuing cost increases in Medicaid. The program is simply not sustainable over the long — or even medium — term.
The alternatives?
The legislation offers empty promises and ignores real — and popular — solutions.
A single-payer universal coverage plan could cut costs by streamlining health care paperwork, making health care affordable. Massachusetts Blue Cross spends only 86 percent of premiums paying for care. It spends the rest — more than $700 million last year — on billing, marketing and other administrative costs. That’s 10 times as much overhead per enrollee as Canada’s national health insurance program.
Overall, Massachusetts residents will spend $13.3 billion on health care bureaucracy this year — nearly one-third of our total health bill. If we cut bureaucracy to Canada’s levels we could save $9.4 billion annually, enough to cover all of the 748,000 uninsured in Massachusetts and to improve coverage for the rest of us. Single-payer is the only route to affordable universal coverage.
Single-payer is popular
The Massachusetts Nurses Association supports it along with dozens of other labor, seniors and consumer groups; so do 62 percent of Massachusetts physicians according to a recent survey. National polls find that almost two-thirds of Americans favor a tax-funded plan like Medicare that would cover all Americans.
But single-payer national health insurance threatens the multimillion-dollar paychecks of insurance executives and the outrageous profits of drug companies and medical entrepreneurs.
It’s time for politicians to stand up to the insurance and drug industries and pass health reform that can work.
Steffie Woolhandler, M.D., M.P.H., and David Himmelstein, M.D., are primary care physicians at Cambridge Hospital and associate professors at Harvard Medical School. They co-founded Physicians for a National Health Program.
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