The Massachusetts Health Plan: Proceed With Caution

On April 12, 2006, Massachusetts passed legislation designed to provide all state residents health care insurance. The law takes effect July, 1, 2007. The Galen Institute analysis points out several areas of concern.

The law requires every state resident to purchase health insurance or face an additional state income tax as a fine. The fines may not be sufficient to force people to purchase coverage. The law also requires all employers (with 11 or more employees) to offer health insurance, or face a fine of $295 per employee as well as pay any uninsured employee health care costs in excess of $50,000 a year.

The plan creates the "Connector," which is a purchasing pool for policies. However, any policy offered must meet all current Massachusetts coverage requirements, as well as provide a zero-deductible plan, without co-payments or premium charges for low income workers.

The plan creates at least 10 new boards and commissions to create and run the new health insurance system. Plus, state agencies will monitor individual's income levels, and health habits to determine how much that individual should pay in premiums.

Funding may materialize by redirecting about $1 billion in uncompensated care, however nothing in the legislation will cap health care costs.

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