Thank you for your consideration of my remarks and for your leadership on this critically important issue. I’m here to testify today in support of including a public insurance option in any health care cost control bill that is reported out by the committee.
I’m proud that Massachusetts has been an innovator in universal health care reform. Steps taken in recent years have expanded health insurance coverage to nearly 98% of Massachusetts residents, while ensuring that the health insurance coverage that most residents receive is comprehensive.
However, as we all know all too well, for many Massachusetts families, having health insurance coverage is different from having access to quality, affordable health care — and rising costs threaten to undo much of the work that we have accomplished.
Massachusetts has the highest per capita health care costs in the country, and these continue to rise. In 2010, premium costs for individual families spiked 10 percent, and businesses faced a 12 percent hike in costs. If current trends continue, per capita health care spending in Massachusetts is projected to nearly double between now and 2020. These unsustainable cost increases will force families, small businesses and public institutions alike to make difficult choices, and substantially reducing the quality of life for everyone in the Commonwealth.
I continue to believe that the most effective means of controlling health care costs in Massachusetts while improving access to and quality of care would be a measured transition to a single payer health care system.
I encourage members of the Committee to play close attention to the work being done by the state of Vermont, which looks like it will be starting the process of establishing a single payer system for its residents later this year.
I would also encourage the Committee to consider the inclusion of a public health insurance option – such as the one President Obama and Congressional Democrats have championed – in any cost-control healthcare reform presented this session.
A public option will help expand access to quality and affordable healthcare for all residents of the Commonwealth in two key ways.
First, a public plan could operate without excessive administrative and marketing costs, high executive salaries or a need to generate profits. Medicare, for example, uses about 2% of its funding for overhead and administration, compared to nearly 10% for most private insurance companies. A strong public option would allow citizens in both the public and the private sector to choose an insurance plan, run like Medicare, which preserves comprehensive coverage while maintaining lower premiums.
In addition, having a meaningful number of options available to Massachusetts families is a necessary component of a health care system that strives to control costs. In Massachusetts, three insurance companies have a combined market share of nearly 70% of the health insurance market. Having a public option would give Massachusetts families more choices and thereby increase competition and innovation to reduce costs.
As a result, a public option could provide a good deal for consumers and keep pressure on private insurers to keep their policies affordable and treat their customers well by acting as a benchmark for affordability and quality of care.
This year, Representative Jason Lewis and I have filed S.500 and H.1228, An Act Establishing a Public Health Insurance Option. That legislation might be helpful to consider when looking to how the Commonwealth might implement a public option. I’d be happy to work with any members of the Committee interested in pursuing this possibility and be glad to answer any questions you may have.