Massachusetts: Single-Payer Program
Upshot
The Massachusetts Legislature introduced two proposals this session that would support the development of a single-payer system. The first bill, H. 1267 / S. 766, provides the framework for a Medicare for All single-payer program. The second bill, S. 758, requires an analysis of a methodology for a single-payer benchmark, which would provide an estimate of the cost of operating a single-payer program.
The second bill would also assist the Executive Director in developing and implementing the financing structure for the Massachusetts Health Care Trust single-payer program, as required by the first bill.
Though the Medicare for All bill garnered moderate support with 60 cosponsors between the House and the Senate, it failed to advance and was eventually accompanied by a bill for further study of the topic. Similarly, the single-payer benchmark bill was accompanied by a study order, which authorizes the Committee to study the bill and similar ones and file a narrative report of its findings during the recess period. Neither of the study bills have been approved.
Background
Massachusetts has long been interested in establishing a Medicare for All single-payer system. Most bills to do so have been sent to study for further examination have died without any additional action. This year’s bill faced a similar fate and was sent to study, despite having numerous cosponsors on the bill. Advocates have also pushed for local non-binding ballot measures that have dated back to 1998. The most recent ballot language asked voters if their elected state representative should support legislation that would create a single-payer system for the purposes of attaining universal coverage and establishing health care as a human right. Advocates explained that while non-binding ballot initiatives do not require legislators to become cosponsors of specific legislation, they can be used to hold legislators accountable. In the most recent ballot measure in 2010, support for the measure ranged from 52 percent in the 12th district to 76 percent in the 15th district.
Massachusetts features a state-based individual Marketplace, known as Health Connector, with eight carriers operating on the Marketplace in 2022. The state also implemented an individual mandate with a penalty. For the 2022 open enrollment period, 268,000 residents enrolled in Marketplace coverage.
Massachusetts has been a leader in health care reform since the enactment of the 2006 health care reform law that provided near-universal coverage for state residents. Since its enactment, Massachusetts has pursued other incremental reforms, including legislation that would establish a public option.
Summary
The Massachusetts Legislature introduced a bill aimed at supporting the development of a single-payer system for the state. The first bill would create a Medicare for All single-payer program and establish processes for determining eligibility, benefits, and provider reimbursement. The second bill would analyze how a single-payer system could generate savings for the state. Summaries for each bill follow.
An Act Establishing Medicare for All in Massachusetts: The bill (H. 1267 and S. 766) outlines program requirements for a Medicare for All system that would be known as the Massachusetts Health Care Trust, to be referred to as the Trust. Additional details on the Trust administration, benefits, provider participation and reimbursement, and financing follow.
Board of Trustees and Executive Director – The Board of Trustees would be responsible for ensuring universal access to high quality, affordable health care for every resident and would be responsible for establishing policies related to the benefit package, as well as provider participation and reimbursement.
The Executive Director would be responsible for administering and enforcing the provisions of this law. The Executive Director would be directed to establish policies related to enrollment, state purchasing power for prescription drugs, health service reimbursement, state budgets for delivering health services, and annual benefits.
Covered Benefits – All Massachusetts residents, regardless of citizenship status, including people who are incarcerated, would receive coverage for services that mirror the categories of the EHBs. Participants would not be subject to any deductible, copay, coinsurance, or other cost sharing for covered benefits
Eligible Health Care Practitioners and Facilities – All licensed health care practitioners and facilities would be eligible to participate in the program if they: 1) do not accept payment from other insurance providers for services covered by the Trust; 2) agree, in writing, to furnish services without discrimination; 3) do not balance bill patients; and 4) provide information, as requested, to the state for analysis.
Budgeting and Payments to Eligible Health Care Practitioners and Facilities – Each year, the Executive Director would be required to establish separate budgets for program operations, including payments for services and administrative activities, and capital projects. Additionally, the Director would be required to set reimbursement rates for practitioners.
Establishment of the Health Care Trust Fund and Funding Sources – The bill provides that amounts deposited into the Trust Fund would be used to:
Pay eligible health care practitioners and facilities for covered services provided to eligible individuals;
Fund capital expenditures for eligible health care practitioners and facilities for approved capital investments;
Pay for preventive care, education, outreach, and public health risk education initiatives;
Supplement other sources of financing for education and training for the health care workforce;
Supplement other sources of financing for training and retraining program for workers displaced as a result of administrative streamlining gained by moving from a multi-payer to a single-payer health care system;
Fund a reserve account to finance anticipated long-term cost increases due to demographic changes, inflation, or other foreseeable trends that would increase Trust Fund liabilities; and
Pay for administrative costs of the Trust.
Regarding funding sources, the bill states that the Trust would be the repository for all health care funds and related administrative funds. Revenue for the Trust would be generated through a “fairly” apportioned, dedicated health care tax on employers, workers, and residents Payroll taxes would range from 7.5 percent on employers to 2.5 percent on employees. A 10 percent tax on unearned income would also be established. This would replace spending on insurance premiums and out-of-pocket spending for covered services.
Additionally, the bill would require that public spending on health insurance be consolidated into the Trust to the greatest extent possible. To maximize all federal financial support, the Executive Director would be required to seek all necessary waivers, exemptions, agreements, or legislation to ensure that all current federal payment for health care be paid directly to the Trust Fund.
Implementation of the Health Care Trust – Once the Board and the Executive Director are in place, they would be required to set a general timeframe for establishing the Trust, with a launch date no less than one year and no more than 18 months after the first meeting of the Board. The bill also outlined the following phases of transitioning from the current health care system towards the Trust:
First Phase of Transition – The Director would be directed to begin: 1) hiring staff; 2) establishing the administrative and information technology infrastructure for the Trust; and 3) negotiating reimbursement lists for health care services, pharmaceuticals, and medical equipment. Health care practitioners would also be required to develop plans for transitioning towards the Trust.
Second Phase of Transition – The bill states that in the second phase, the infrastructure of the Trust would be established, including appropriate offices. The second phase would also feature training for practitioner staff on systems for processing bills to the Trust, and the introduction of accounting regulation to employers for payment of payroll taxes. Finally, residents of the Commonwealth would receive care identification cards with an explanation of benefits and contact information for their regional office.
An Act to Ensure Effective Health Care as Right: The bill (S. 758) directs the Center for Health Information and Analysis to recommend a methodology to develop a single-payer benchmark, which would be the estimated total costs of providing health care to all residents of Massachusetts under a single-payer health care system in a given year. The benchmark would be required to consider the following:
The costs of a single-payer health care system at different actuarial values; and
Level of cost sharing and provider reimbursement at different actuarial values.
In addition to the methodology for a single-payer benchmark, the Center would also provide an annual report detailing a comparison of the actual health care expenditures in the Commonwealth for 2022, 2023, and 2024 with the single-payer benchmark for 2022, 2023, and 2024, respectively, and must indicate whether Massachusetts would have saved any money under a single-payer health care system. The first report would be due no later than July 1, 2024.
If the report were to determine that a single-payer benchmark would outperform actual total health care expenditures in 2022, 2023, or 2024, the Health Policy Commission would be required to submit a proposed single-payer health care implementation plan, which would include proposed legislation.