The Massachusetts plan is a health care plan / health insurance plan that became law on April 12, 2006, and which required residents of that state to either purchase health insurance by July 1, 2007, or pay a tax penalty. Massachusetts subsidized the costs for those who cannot afford to purchase health insurance. Massachusetts was in a better position than most states to pass this type of law because Massachusetts has a billion-dollar fund from tobacco settlements available to defray the costs, had fewer uninsured (10%) than the national average (18%), has fewer illegal aliens than other states (who are typically neither insured nor file tax returns), and has two powerful representatives in the U.S. Senate to provide additional subsidies as needed (Ted Kennedy and John Kerry). 46 million Americans do not own health insurance nationwide.
In 2007, these states were expected to try to pass similar laws: California, Louisiana, Maryland, Minnesota, Ohio, Wisconsin, Colorado, Utah, and New Mexico, and also the District of Columbia. None did, but Ted Kennedy proposes passing a similar law in 2009. In 2006 Vermont and Maine passed similar laws.
By 2007 the enormous burdens to the taxpayer were emerging, and criticism intensified against the Massachusetts plan. The cost overruns in the first year were 50% of budgeted amount.
By 2008 there were long delays to see a doctor, due to an increase in patients seeking benefits for their insurance payments. Some patients have even felt compelled to share their doctors' appointments with other patients, rather than not see a doctor at all. Family Research Council explains the Plan in detail.
Critics suggest that this approach of the state requiring its residents to purchase a type of product is contrary to free enterprise. Many people choose "self-insurance" voluntarily, and forcing them to buy a product they do not want is both unusual and probably unhelpful to the economy, as it will take money away from where it might otherwise be spent. Even car insurance, which many people think is mandatory, has exemptions for self-insurance and sometimes religious belief in most states. Also, car insurance laws are justified to protect innocent third parties victimized by accidents, not to protect the owner of the insurance.
However, hospitals are required to treat individuals who visit the emergency room, regardless of their ability to pay or their insurance status. This is also contrary to free enterprise, however for the good of the community, the freedom of hospitals to turn sick people away is curtailed. If people must either buy insurance or pay a penalty, the financial incentive to not buy insurance is removed. This in turn relieves the burden of non-payers from hospitals, who can then use these funds to improve their health care and equipment.
Heritage Foundation Support
The Heritage Foundation, traditionally a conservative think tank, surprisingly supported the Massachusetts plan. Then-Governor of Massachusetts, Mitt Romney, presented his health plan at Heritage in January 2006, and Heritage lent conservative credentials to the big government plan. For example, Heritage described the mandate compelling individuals to purchase insurance as a solution to the "free rider" problem of people obtaining free medical care without paying for it. "Under federal law, nearly all hospitals are required to provide a certain level of treatment to all patients who visit their emergency rooms, regardless of those patients’ ability to pay." Yet the Massachusetts plan does nothing to require non-taxpayers to have insurance, such as illegal aliens or people without income.
After passage in 2006, Heritage promoted the plan further:
- Massachusetts officials have made significant strides in reforming their health insurance market, and other states can learn from the Massachusetts experience. States should build on the solid features of the Connector: the establishment of a statewide health insurance exchange to allow individuals to buy and own health insurance without losing favorable tax treatment and direct assistance to low-income individuals and families for the purchase of private coverage using existing government funds. ...
In April 2007, Heritage wrote that "Massachusetts's experiment in health market reform is already showing progress," concluding that "Massachusetts enacted a major reorganization of its health insurance market to allow, for the first time, small business employees the right to own personal and portable health insurance that they can take from job to job without a loss of tax benefits." Praise by Heritage continued through 2007:
- Massachusetts has reached a bipartisan agreement to give citizens what they really want: a health system with all the familiar comforts of existing employer group coverage, but with the added benefits of portability, choice, and consumer control. Those are huge positives.
Based on a search on its site, not a single Heritage paper admits how the Massachusetts plan forces the public to pay for abortions for anyone, not merely the poor.
After the November 2008 election, Stuart M. Butler released two position papers for Heritage concerning possible health care initiatives by the new Congress and Obama Administration. Neither mentions the Massachusetts plan. One of these papers does describe the plan proposed by Democratic Max Baucus as "A Starting Point for Serious Discussion."
- It treats abortion the same as legitimate, health-promoting medical procedures. Abortion is available under the Massachusetts plan without restriction if recommended by a doctor, and the bulk of the fee to the abortionist is paid by the insurance company as funded by the public. Only a $50 co-pay required from the mother/victim.