BOSTON – Touting dramatic reductions in health care costs, improved access to health care for all residents, and a boost to local businesses, State Senator Jamie Eldridge (D-Acton) and State Representative Jason Lewis (D-Winchester), along with health care advocates, providers, employers, and employee union leaders, came out in support of S501, “An Act Establishing Medicare for All in Massachusetts,” at a legislative hearing at the State House this afternoon.
The bill, heard by the Joint Committee on Health Care Finance, would create a single payer health care system for Massachusetts: a universal public insurance plan covering all medically necessary care. This plan would function for residents under 65 much the way Medicare does for residents 65 and older, but without premiums or copayments.
A similar plan is currently used successfully by many countries around the world and is in the process of being implemented in Vermont.
“If Massachusetts is serious about reducing health care costs for families, businesses and state and local governments, we need to stop tinkering at the edges of a broken system and enact a single-payer healthcare system. It’s the only reform that would truly reduce costs in a substantial way, eliminating medical debt and bankruptcies while guaranteeing access to quality, affordable health care as a right for all residents of the Commonwealth,” said Senator Eldridge.
“I believe that healthcare is a basic human right, and we must do everything we can to ensure that every Massachusetts resident has access to quality, affordable care,” added Representative Lewis. “We can alleviate the burden of escalating healthcare costs on families and small businesses by instituting a robust single payer plan here in the Commonwealth.”
Economist Gerald Friedman, from UMass-Amherst, noted at the hearing that a single-payer system could reduce health care costs by nearly $13 billion a year (or 19%) in Massachusetts. Even after expanding coverage to all Massachusetts residents, this would leave savings of over 17.6% of current expenditures. Municipalities in particular would benefit; according to Friedman’s calculations, local governments would save over $350 million a year.
Friedman also noted that, when added to significant administrative savings within companies, a single-payer system would dramatically enhance the competiveness of Massachusetts companies, adding nearly 100,000 additional jobs to the economy.
“Single payer health care saves lives, saves money and prevents suffering. Every other country in the world that has achieved universal coverage and controlled costs has relied on a single-payer system to get there. A single-payer system will best achieve the health care reform goals that many of us share: improving coverage for families that already have coverage, reducing health care costs, and simplifying the health care delivery system,” added Benjamin Day, Executive Director of Mass-Care, the Massachusetts Campaign for Single Payer Health Care.
The bill filed by Eldridge and Lewis would create a plan that covered all medically necessary care for all residents of Massachusetts, replacing current employer and employee premium payments with an employer and employee payroll tax. The total payroll tax would be 10% – the same as current average spending on health insurance – and would default to 7.5% for employers and 2.5% for employees, although employers could choose to pay for part or all of employees’ portion of the payroll tax, and collective bargaining agreements would be recognized.
Because payroll taxes primarily impact low- and medium-income wage earners, a 12.5% tax on unearned income would be imposed, reversing large cuts to state taxes on dividends and interest passed between 1998 and 2002. Lastly, all current state spending on health care would be consolidated, and the state would seek to have federal funds – such as those paid for Medicaid and Medicare recipients – paid directly to the state’s single payer fund by applying for federal waivers.
The net result would be billions of dollars in annual savings from eliminating provider-level and private insurance administration. Eliminating insurance premiums would create significant after-tax savings for over 80% of Massachusetts residents.