A Public Option for Massachusetts

Health care cost control is a hot topic on Beacon Hill these days, as the Legislature begins to consider various proposals by Governor Patrick and others to reform our health care system in various ways to reduce health care costs.

I’m proud that Massachusetts has been an innovator in universal health care reform, which in recent years has expanded health insurance coverage to nearly 98% of Massachusetts residents.

But 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.

It’s clear the Legislature needs to do something to stem the tide of rising health care costs. I testified this morning at the Health Care Finance committee hearing on some of my proposals for reducing health care costs while improving access to care. (Read my testimony here.)

I’ve believed for a long time that the most effective way of controlling health care costs in Massachusetts while improving access to and quality of care would be a measured transition to a single payer “Medicare for All” health care system.

I’ve filed legislation this session that would do just that. “An Act Establishing Medicare for All” would create a single-payer health care system for Massachusetts, guaranteeing first rate health care coverage for every resident of the state, while saving money for state and local government, businesses, and residents.

Massachusetts can and should also look to Vermont, which looks like it will be starting the process of establishing a single-payer system for its residents later this year.

Given the current political climate, building the support necessary to pass a single-payer bill is a longer term goal. But that doesn’t mean there aren’t solid steps we can take to expand access to affordable health care.

This morning, I encouraged the Health Care Finance 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.

Over the long term, I believe the only way to truly guarantee affordable, universal high quality health care is to implement a Medicare for All system. In the short term, however, giving Massachusetts residents a public insurance option would be a great way to help reduce skyrocketing health care costs.

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