"Expect Massachusetts to Follow the 'Universal' Failure of Other States" by Benjamin Day

Word leaked out this week that Massachusetts’ negotiations with the Bush administration over renewing the state’s Medicaid waiver – the agreement under which the federal government provides matching funds for our Medicaid program as well as the new health law – are not going swimmingly. With federal officials seeking to slash some $2 billion worth of health spending from the state’s proposed budget, the already fiscally troubled health reform experiment in Massachusetts may be on even more tenuous ground in the coming years.

However, historians of health reform will receive this news with a distinct sense of déjà vu. The Massachusetts reform law, passed in 2006, is often described as a ‘first-in-the-nation’ effort, and is billed as a universal or near-universal measure. Upon passage, the New York Times claimed that “The bill does what health experts say no other state has been able to do: provide a mechanism for all of its citizens to obtain health insurance.” Then Senate President Robert Travaglini claimed that “the biggest victory is for the people of Massachusetts, who will now have equal access to the most renowned healthcare in the world.” These were significant promises to Massachusetts residents, and significant promises for the nation. Fast forward just one year later and the math behind the promise of universal health care is looking fuzzy.

Jon Kingsdale, Director of the Commonwealth Connector, tells USA Today that "If we have double-digit increases (annually in costs), health reform is not sustainable," at just about the same time that new Senate President Therese Murray predicts that "If we do not constrain healthcare costs, the system we worked so hard to create and implement will collapse."

The problem of course is that the United States health care system produces extraordinarily high health care costs – two to three times as much as countries that provide universal, comprehensive coverage – and those costs have been systemically rising at an unsustainable pace. Although Massachusetts is presented as an innovative and sweeping compromise bill, in fact there have been a dozen other reform bills passed by states around the country that were also hailed upon passage as “universal,” as “models for the nation,” and many were also forged out of bipartisan compromise. In a recent paper published by myself and Drs. Steffie Woolhandler and David Himmelstein in the International Journal of Health Services, we track the fate of these bills – in Washington state, in Minnesota, in Oregon, in Maine, and dramatically in Tennessee. All follow a similar model of trying to expand coverage to the uninsured through expanded public subsidy programs, like our Commonwealth Care. In Tennessee for example, the federal government essentially agreed to pick up the entire tab for extending coverage to hundreds of thousands of uninsured in the state by matching $2 for every $1 the state spent on its public expansion program (called TennCare). The state also projected significant savings from moving its entire Medicaid population into managed care plans, from which it hoped to pay for the newly insured. This gave TennCare a significant financing advantage over Massachusetts, but after two years of declining numbers of uninsured, TennCare was forced to cap enrollment (this is common for all of the reform laws we analyzed: they are rapidly forced to limit enrollment or erode benefits), and on the third year Tennessee’s uninsured population was larger than before reform had passed. Closer to home, a large Medicaid expansion in Massachusetts during the mid-1990s that extended coverage to upwards of 300,000 uninsured residents made a visible impact on reducing the uninsured population in the state… But only for a few years, after which the numbers rapidly drifted up to levels prior to the expansion, and we found ourselves back to where we started. In most of the states we report on, ‘universal’ reform bills have had no noticeable impact on the total uninsured populations whatsoever.

There were only two things that separated the Massachusetts reform law from similar attempts by other states. Firstly, we had virtually no cost control components built into the legislation. There was an attitude among advocates supporting the reform law that if we could get the state to commit to covering the uninsured, it would have to find ways to finance it over time. This prediction has not been borne out in the many other states that have passed ‘universal’ reform bills. The politics of cost control are not amenable to broad coalitions inclusive of grassroots groups, businesses, and the health care industry in the way that the politics of access are. Secondly, the ‘individual mandate’ is unique to the Massachusetts plan. However, the logic of ballooning health care costs that render new insurance programs unaffordable for the state, for businesses, and for individual households, remains the same.

Without a politics of cost control, the politics of increased access have put us on a national health reform treadmill. We expend immense political capital and economic resources, only to find ourselves legislating the same problem with no improvement a few years later. There are no examples of countries that have been able to control their health care costs effectively, or to extend universal, comprehensive coverage to the population, without some form of public budgeting and public insurance (or private insurance so heavily regulated that insurers are not competing on illness-avoidance or claims denial). When we look to the history of state reform in the United States – a history we seem to forget every time a new state reform law is introduced – it becomes even more urgent that sustainability be married to any attempts to expand access to care, and that we renew the public discussion over single payer reform.

Benjamin Day
Director, Mass-Care: The Massachusetts Campaign for Single Payer Health Care