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What’s Behind the Health Care Impasse?

by Senator Richard T. Moore

February 27, 2006 - Why can’t we resolve the differences among the House, Senate, and Governor’s health care reform plans? Simply stated, it seems that the problem is that the perfect, being the enemy of the good, has frozen us into inaction.

At the risk of being accused of over-simplifying the complex plans under consideration, all three plans strive to extend access to health insurance to every resident of Massachusetts.

  • The House claims that their plan covers every resident, but requires a broad-based payroll tax on small businesses that don’t offer health insurance to their employees in order to subsidize affordable insurance plans that every resident will be required to carry or face individual tax penalties. The House relies heavily on expansion of Medicaid eligibility to cover more low income residents and revenue from a business payroll tax or assessment that, an analysis by the Massachusetts Taxpayers Foundation suggests, may not be sufficient to cover the number of individuals initially claimed.
  • The Senate wants to cover every resident someday, but favors a phased, incremental approach seeking to cover at least fifty percent of the uninsured, easing the cost-shifting that increases the burden on the insured through more realistic provider reimbursements, requiring a “free rider” surcharge on businesses that don’t offer health insurance to employees when those employees seek free health care, and investing in prevention, error-reduction technology, and quality improvement. The Senate restores cuts made in Medicaid coverage during the recent recession and expands some Medicaid coverage especially for children. The Senate would expect to continue to expand access to care to every resident after evaluating the success and sustainability of their plan.
  • The Governor wants every resident to obtain health insurance and encourages the insurance market to offer low cost health plans by using funds from the phasing out of the uncompensated care pool to support subsidies for safety net care for the poor, enrolling every eligible resident in Medicaid, and investing little or no additional funding.

All of these differences are being debated under the very real shadow of cuts in federal support for health care in every state in order to ease the federal deficit and retreat for the social reforms of earlier national administrations. In Massachusetts, the federal government insists that in order to justify its continued support of supplemental Medicaid funding for the state, the state must demonstrate that it will expand access to care without significantly increasing the cost to the federal budget. Otherwise, the federal government will decrease its support by $385 million a year placing many of our safety net hospitals at severe risk. 

When Senate President Travaglini first announced his goal of extending access to health insurance to half of the state’s uninsured, he made it clear that achieving that goal was contingent upon continued federal Medicaid support. The House health plan relies upon increased federal support, as well as increased revenue, to meets its full coverage objective. The message from Washington, however, appears to eliminate a major foundation of the House plan and jeopardizes the sustainability of even the less expansive Senate plan unless the federal waiver requirements are addressed in a timely manner.

Meanwhile, advocates for immediate full coverage of the uninsured by raising taxes on businesses and on cigarettes, as well as advocates of a single-payer (read tax supported) health care system are championing the House proposal since it appears to represent greater movement toward their long-sought goals. Businesses, whether they offer employer-based health coverage or not, vigorously oppose adding major new costs to any businesses for health care, and those that do offer employer-based health coverage want relief from spiraling health insurance premiums.

The Governor and the Senate will not accept a broad based payroll tax or assessment, because of concern that imposition of such a tax on small business will be detrimental to the state’s economic recovery from the recent recession. Small businesses create most of the new jobs and few new jobs are being created in the current economy as it is, let alone if a new payroll tax or major assessment for health care were imposed. The message that a new tax would send to the business community as a whole, it is feared, would also signal a perceived hostility toward business by state government that could harm the economy further. In addition, the Senate believes that expanded taxation for health care is unnecessary to achieve its stated goal of covering at least fifty percent of the uninsured. The Governor agrees that new taxes are unnecessary and also feels that individuals need to be more responsible for their health insurance needs.

The House has been reluctant to embrace investments in prevention and error reducing technology, or anything less than immediate full access to coverage of all residents without the revenue that they anticipate from their proposed broad-based payroll tax or employer assessment. But is it all that helpful to expand access to care if that care is inferior in quality and even unsafe for patients, or if we ignore the need to prevent serious illness through early screening for disease?

The Governor and the House insist upon a mandate for all individuals to obtain health insurance or face penalties for failure to obtain coverage. The Senate might consider such a significant shift, but only if provisions are made to ensure that affordable insurance products could be offered into the future and that low income workers will not be unduly penalized if they cannot afford these new insurance products.

The debate has reached an impasse, as the competing sides dig in and attack the other, sometimes on a personal level. The impasse, not only jeopardizes federal Medicaid funding needed to support the health safety net offered by many hospitals and health centers, but is holding up action on other pressing state issues such as investing in economic development, reforming the welfare system, paying for other state needs as well as reaching agreement on next year’s spending plan.

Given the lateness of the date for achieving consensus, we believe the Legislature’s first priority ought to be on salvaging the federal Medicaid payments by immediately enacting a scaled down bill to meet the minimum requirements for the federal waiver approval. However, we also believe that the extraordinary effort of so many people in both branches of the Legislature, in the Executive Branch, and outside the State House should not be squandered. We should go back to the negotiating table of the Conference Committee, without the threat of losing federal dollars, in order to craft significant health care reform.

While we cannot seem to agree on a “perfect” health reform plan that covers everyone now, is it possible to achieve agreement on what, by any measure, would still be a “good” plan that makes significant progress at reform and expanded accessibility?

For this to happen, the House would have support investments in prevention, patient safety — including infection control - and computerized physician order entry and to drop its insistence on a broad-based payroll tax or assessment. The Senate would have to agree to strengthen responsibility for employers to assist with some level of employee health coverage and some form of individual responsibility to seek insurance. And the Governor would have to decide to invest his political capital less on trying to broker a compromise based on his ideas for reform and more on using his friendship with HHS Secretary Michael Leavitt and his party affiliation with the Bush Administration to gain greater support for future Medicaid expansion as other Republican governors appear to have done. Finally, all three — House, Senate, and Governor could learn from the sage advice of President Harry Truman who first proposed universal health care, when he said, “It is amazing what you can accomplish if you do not care who gets the credit.”

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Richard T. Moore is a Democratic state senator from Uxbridge who serves as Senate Chair of the Legislature’s Committee on Health Care Financing. Senator Moore is also a member of the House-Senate Conference Committee working to resolve differences in the competing health care bills.

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