A law signed yesterday calls for the 515,000 uninsured residents to have insurance by 2010.

The Philadelphia Inquirer

Massachusetts Gov. Mitt Romney signed groundbreaking, universal health-care legislation yesterday that promises to cover nearly all of his state’s 515,000 uninsured residents by 2010.

The bill, the first in the nation to require all residents of a state to obtain health insurance, is being hailed as a possible blueprint for covering all Americans nationwide.

“An achievement like this comes around once in a generation,” said Romney, who is considering a run for the 2008 Republican presidential nomination. “Today, Massachusetts is leading the way with health insurance for everyone, without a government takeover and without raising taxes.”

Some experts, however, aren’t so sure the plan is a national blueprint. The measure resulted from a federal threat to cut $385 million in Medicaid money unless the state reduced its ranks of uninsured.

Critics claim the new law lacks adequate funding and cost controls that would assure long-term success. They fear that Massachusetts’ high health-care costs ultimately could derail the measure.

“We will look back at this new legislation as a well-motivated but naive, underfunded political approach,” said Alan Sager, a codirector of the Health Reform Program at Boston University’s School of Public Health.

The new law requires people who don’t have health insurance to buy it by July 1, 2007, or forfeit their individual state tax exemptions.

Private insurance companies, working with state officials, will attempt to develop low-cost plans that people can purchase with pretax money through a new state-run insurance exchange. The price isn’t set yet, but state officials hope it will be about $200 per month.

Money that the government had spent to assist the uninsured will go to help needy citizens pay for coverage. People who don’t buy insurance after the second year would have to pay fines equal to half the cost of an affordable plan.

The plan will cost about $1.3 billion in public and private funding a year, with only $125 million in new state money. The remainder will come from existing state and federal sources, as well as $320 million from insurance companies and hospitals.

An additional $50 million is supposed to come from payments from businesses that don’t provide insurance for workers. Romney vetoed that provision yesterday, but the Democratic-controlled state legislature is expected to reinstate it.

By combining elements of personal responsibility, government support and coverage mandates, the plan is an ideological hybrid. That helped the bill overcome long odds to draw nearly unanimous support from state lawmakers, who passed it last week.

“At long last, the impossible dream of health care for all will finally become a reality in our commonwealth,” Sen. Edward M. Kennedy (D., Mass.) said. “This is a moment to savor for all the people of our commonwealth and perhaps for the rest of America, too.”

Peter Brook, 45, a construction worker and diabetes patient from South Boston, will get a government subsidy to help buy coverage due to his low income.

With insurance, he said, he will no longer have to reuse his insulin needles for months at a time or raid his 401(k) to pay for health care. But it’s unclear how much assistance he will receive, and he’s skeptical about whether it will be enough to help him buy a policy.

“I don’t have that full confidence that it’s all going to pan out,” he said in an interview.

People who get no assistance also could have difficulty buying policies. Under the legislation, people who earn more than 300 percent of federal poverty levels — $28,700 for a single person and about $60,000 for a family of four — receive no financial help.

“If consumers are forced to pay for a policy that’s not affordable, there’s going to be another Boston tea party,” said Jamie Court, president of the Foundation for Taxpayer and Consumer Rights, a consumer watchdog group in Santa Monica, Calif.

Provisions of Massachusetts’ New Health-Insurance Law

• Requires all state residents to obtain “affordable” health insurance by July
  2007. Those who fail to do so will lose state tax exemptions and be fined.

• Provides free insurance for individuals and families below the federal poverty line and subsidizes coverage for those with incomes up to three times the poverty level – $60,000 for a family of four.
• Creates a state agency to set up affordable plans for the self-employed and companies with 50 or fewer workers.
• Makes companies that offer no health insurance pay the state $295 per employee each year to help finance the program. This provision was vetoed yesterday by Gov. Mitt Romney; the state legislature is expected to override his veto.
• Projected cost of the program is $316 million in the first year, more than $1 billion in the third. Much of the money is to come from federal reimbursements and existing state spending on health.

Mass. Plan Gets Attention Here

The new Massachusetts universal health-care plan is getting some attention in Trenton and Harrisburg.

Lawmakers in New Jersey say they are looking at the health-care proposals in Massachusetts and other states and promise to introduce legislation this year.

In Pennsylvania, Gov. Rendell is studying the Massachusetts plan and may incorporate elements of it into a proposal for affordable health care in the state that his Office of Healthcare Reform is expecting to release by the end of the summer.

But there are no bills similar to the Massachusetts plan under consideration by the General Assembly at this time.

New Jersey already subsidizes federal Medicaid with a program called FamilyCare, which is health insurance for families earning at or below 350 percent of the federal poverty level. A family of four earning $70,000 a year qualifies for the HMO care the state provides, with premiums and copays calculated according to a family’s ability to pay. The state covers 200,000 people under the program.

A step further would be the so-called Wal-Mart bill. The legislation would require businesses with more than 1,000 employees to provide benefits worth $4.17 an hour — or pay that amount, per worker, into a state fund that would reimburse the nearly $400 million the state spends on FamilyCare and other health-insurance programs each year. The proposal has been stalled by business-group opposition but is scheduled for a hearing next month.
————–
Inquirer staff writers Kaitlin Gurney and Amy Worden contributed to this article.
Contact Tony Pugh of The Inquirer’s Washington bureau at [email protected]