States Likely Would Have To Increase Taxes To Implement Health Insurance Law Similar To Massachusetts'

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Massachusetts' new health insurance law that aims to achievenear-universal coverage in the state might not be easily replicated byother states seeking to overhaul their health care systems, accordingto policy experts, the Boston Globe reports. Presidential candidate former Massachusetts Gov. Mitt Romney (R), who signed the health insurance bill into law, has said that theprogram could serve as a national health care model. However, he "doesnot tell campaign audiences ... that his plan would probably beimpossible to replicate in most states without a tax increase becauseMassachusetts had an uncommon advantage" in a $610 million "free carepool" that the state was able to use to subsidize coverage foruninsured residents, the Globe reports. The pool is financed by assessments on hospitals, surcharges on health insurers and state tax revenue.

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Massachusettsuses about $160 million from the free care pool, in addition to otherstate and federal funds, to pay for the $470 million program. Fourother states -- Maryland, New York, New Jersey and West Virginia --have a free care pool similar to Massachusetts', according to RobertBlendon, a professor of health policy and political analysis at Harvard University.States without such a pool "would have difficulty adopting theMassachusetts approach without levying new fees on hospitals andinsurers to create a similar pool or raising taxes," the Globe reports.

Blendonsaid that Massachusetts' free care pool "made it feasible to put thisapproach together without any discussion of a tax increase," adding,"In the absence of that, there would have been a shortage of funds. Idon't think in Iowa you'd find enough money to do what [Massachusetts]did -- and then the situation is: Where would you get that additionalmoney to do this?" Diane Rowland, executive vice president of the Kaiser Family Foundation and executive director of the Foundation's Commission on Medicaid and the Uninsured,said, "When we've tried to look at -- could other states do [what]Massachusetts did? -- they could move toward that," adding, "But theywould have a much harder climb because they have a bigger gap to fill."

Sally Canfield, Romney's policy director, said Romney believesthat other states could implement similar programs without raisingtaxes if they had more flexibility to use state and federal health carefunds based on their needs. "We firmly believe you can do this in arevenue-neutral way. There are these pots of money around that statesdo receive or their hospitals receive that you can say, 'Let's use thatin the best fashion, let's use that more wisely, let's use that to getpeople into health insurance plans, so they're not using that in ahospital room,'" Canfield said (Levenson, Boston Globe, 11/3).
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Reprinted with permission fromkaisernetwork.org.You can view the entire KaiserDaily Health Policy Report, search the archives, andsign up for email delivery at kaisernetwork.org/email. The Kaiser Daily Health Policy Report is published forkaisernetwork.org, a free service of The Henry J. Kaiser FamilyFoundation.

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