The new law will essentially treat health insurance the same way that automobile insurance is treated in most states. If you want to drive, you must have insurance. Now, if you want be a resident of Massachusetts, you must have medical insurance. The law will make the Massachusetts the first state with such a requirement.
Uninsured residents of the state will be offered a variety of insurance programs, with insurance premiums determined largely by their income levels. Consumers who fall below the poverty line will be offered a premium-free plan that will require a co-pay for prescription drugs, doctor’s visits and hospitalization.
Those that have incomes between the poverty line and up to three times that level will be offered plans that are subsidized by the state. Families with incomes above the level where subsidization available will have to purchase private healthcare plans. The law does not cap the cost of these plans but legislators believe these will cost most people between $200 and $250 per month, per family member.
The state will use its state income tax system to enforce the law. Beginning in 2008, residents will be required to provide information concerning their healthcare plan on their income tax returns. Those that fail to provide this information will lose their personal exemption which may be worth as much as $150. They will also be fined half the cost of the cheapest policy that they should have purchased. This could be as much as $1,250 per family member.
In addition to these charges, the version of the law passed by the legislature would also charge employers $295 annually for every uninsured employee on their payroll. This is the one area of the law that Romney is likely to veto. Legislators wanted to use this money to subsidize insurance for low income individuals but Romney has said that it is not necessary.
The law passed with by a wide margin, and enjoys bipartisan support. The final vote of the legislature was 37 – 0 in the state senate and 154 – 2 in the state house of representatives.
Lawmakers envision that with its passage, Massachusetts will put an end to an era where 550,000 state residents go uninsured. The medical bills for these people have to be picked up by the state and result in higher taxes. But lawmakers may be overly optimistic about the bills impact for those who don’t qualify for a subsidized plan because it fails to address two key areas.
Rather than making sure that medical insurance would be available to all state residents regardless of any pre-existing conditions, the law allows residents to obtain a waiver for insurance if they can’t find an affordable policy. No caps were placed on what insurers could charge state residents. The $250 per policy estimate grossly underestimates the cost of insurance for those with certain conditions, such as cancer.
The law also failed to come up with any formula for determining what the word "affordable" actually means. This may provide a loophole for some to avoid taking out an insurance policy, while it may face others to pay for policies that they really can’t afford.
Even so, the feeling among state legislators seems to be positive on both sides of isle. There is a general feeling that the federal government and most other states have failed to address health insurance needs but that Massachusetts has at least taken the first step to solve a real social problem. The State’s Speaker of the House, Salvatore F. DiMasi said, "We did something to solve the problem."
Unanticipated medical bills and loss of a job are the two primary reasons for personal bankruptcy filings in the United States.
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