The Politics of Health Care Reform: How Massachusetts learned from the past and found compromise on a difficult issue

Lesson #1: We learned from our mistakes

In 1988, Democratic Governor Mike Dukakis championed a health reform bill that was path breaking and therefore controversial.  It eventually became law, but only passed the House and Senate by a combined margin of six votes. 

A major provision of the law, known as “pay or play,” required that businesses with more than six employees were required to provide health insurance or pay an annual per-employee tax of $1,680 to fund coverage expansions.  This part of the plan needed to be implemented for the entire law to work.  The business community was opposed to this.  Citing mounting deficits and the recession, Governor Dukakis’s successor, Republican Governor William Weld, did not implement this provision, ultimately repealing the law and effectively ending any major expansion of coverage.

Many of the people involved in the 2006 law worked on the first bill and remembered what happened when a bill was pushed through the legislature without real support from all sides.  In 2006, they approached the task differently. 

Lesson #2: All the Stakeholders were at the table

In 2005, a diverse array of stakeholders was getting very serious about wanting to reform health care in Massachusetts. Business leaders, community activists, providers, insurers, the Democratic Legislature and the Republican Governor each had views about what should be done and how. At the same time, they were able to recognize the unique political opportunity at hand given this shared goal, and were willing to work together to forge a broader compromise rather than miss the moment and settle for a less comprehensive reform. The timing was helped by pressure from the federal government, which wanted the state to come up with a new way of paying for care for the uninsured or else risk losing $385 million in federal funds.

In 2006, the health care reform law was passed with a combined House and Senate vote of 192-2.

Lesson # 3: All the stakeholders have stayed at the table

This time, each group made contributions and compromises, and each felt ownership of significant pieces of the bill.  The three top political leaders all inspired key components of the new reform law.

Former Republican Governor Mitt Romney wanted to take a conservative approach to health care reform.  Looking at data that showed young adults were more likely to have no insurance – even when they could afford it – Governor Romney stressed personal responsibility.

The Governor also talked about accountability and market reform.  His office suggested establishing the Connector, a virtual marketplace where residents could buy health insurance plans from private insurance companies with pre-tax dollars.

House Speaker Salvatore DiMasi wanted to ensure that businesses took responsibility for providing coverage to their workers, and therefore he wanted to penalize businesses that did not do so.  The final version of the bill included a $295 per worker assessment on business that did not provide adequate insurance. 

Former Senate President Robert Travaglini suggested expanding the Insurance Partnership program, which is an existing state program that provides subsidies to employers and their low-income employees for the purchase of private insurance.  This proposal was included in the final bill. 

Lesson #4: Involved the state and private providers and combined market solutions and subsidies

The 2006 plan allowed for private plans that also included subsidies.  Families making up to 300% of the poverty level were allowed to purchase plans from Medicaid managed care organizations.

Also, for some who were making above 300% of the poverty level, the Connector sought to work with them to find an insurance option.

Lesson #5: Did not overreach

In 2006, no party was unwilling to compromise. Remembering the 1988 history, each side came to the table wanting health care reform to pass.  In the end, everyone was involved in the give and take, and together, they found consensus.

To oversee the implementation of a key part of the law, the Connector Board was set up.  The Board consists of economists, state government leaders and members of the advocacy, labor and business communities.

With the realization that a huge overhaul of health care is difficult, the Connector is in place to look for areas that need adjustment and make them.