Most Other States Likely Would Have To Increase Taxes To Implement Health Insurance Law Similar To Massachusetts', Experts Say

Main Category: Health Insurance / Medical Insurance
Also Included In: Public Health
Article Date: 07 Nov 2007 - 5:00 PDT

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Massachusetts' new health insurance law that aims to achieve near-universal coverage in the state might not be easily replicated by other states seeking to overhaul their health care systems, according to policy experts, the Boston Globe reports. Presidential candidate former Massachusetts Gov. Mitt Romney (R), who signed the health insurance bill into law, has said that the program could serve as a national health care model. However, he "does not tell campaign audiences ... that his plan would probably be impossible to replicate in most states without a tax increase because Massachusetts had an uncommon advantage" in a $610 million "free care pool" that the state was able to use to subsidize coverage for uninsured residents, the Globe reports. The pool is financed by assessments on hospitals, surcharges on health insurers and state tax revenue.

Massachusetts uses about $160 million from the free care pool, in addition to other state and federal funds, to pay for the $470 million program. Four other states -- Maryland, New York, New Jersey and West Virginia -- have a free care pool similar to Massachusetts', according to Robert Blendon, a professor of health policy and political analysis at Harvard University. States without such a pool "would have difficulty adopting the Massachusetts approach without levying new fees on hospitals and insurers to create a similar pool or raising taxes," the Globe reports.

Blendon said that Massachusetts' free care pool "made it feasible to put this approach together without any discussion of a tax increase," adding, "In the absence of that, there would have been a shortage of funds. I don't think in Iowa you'd find enough money to do what [Massachusetts] did -- and then the situation is: Where would you get that additional money to do this?" Diane Rowland, executive vice president of the Kaiser Family Foundation and executive director of the Foundation's Commission on Medicaid and the Uninsured, said, "When we've tried to look at -- could other states do [what] Massachusetts did? -- they could move toward that," adding, "But they would have a much harder climb because they have a bigger gap to fill."

Sally Canfield, Romney's policy director, said Romney believes that other states could implement similar programs without raising taxes if they had more flexibility to use state and federal health care funds based on their needs. "We firmly believe you can do this in a revenue-neutral way. There are these pots of money around that states do receive or their hospitals receive that you can say, 'Let's use that in the best fashion, let's use that more wisely, let's use that to get people into health insurance plans, so they're not using that in a hospital room,'" Canfield said (Levenson, Boston Globe, 11/3).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation© 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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