Massachusetts health reform (known as “Chapter 58”) has been billed as a “model for the nation” and a
“blueprint to universal coverage.” This rhetoric has generated expectations that Massachusetts residents
of all incomes will be able to get affordable coverage. This hype distracts us from what really has been
achieved, what hasn’t, and the strengths and weaknesses of the political strategy that brought us the new law.

Click here to download this easy-to-understand pamphlet by Mass-Care and Massachusetts Jobs with Justice describing how the law works, its successes, and its short-comings.

The impacts of our commercial health care industry extend beyond the problems faced by individual patients. Businesses are losing profits and municipalities struggling to balance their budgets as they suffer under the weight of rising employee health care costs. Labor unions are losing the fight to win or preserve comprehensive health coverage for their members, often accepting wage cuts to keep benefits. Those who suffer from chronic illness hit disproportionately hard by the growth of cost sharing (co-payments and deductibles), are red-lined in many states for their pre-existing medical conditions, and struggle to preserve coverage from job to job. Even seniors are not immune to the woes of the private insurance world. The Medicare system is increasingly privatized, in the forms of Medicare ‘Advantage’ prescription drug plans, and inadequate coverage for hospitalization and long-term care, necessitating supplemental (or ‘Medigap’) insurance. Seniors spend on average 14% of their fixed incomes on medical expenses, much higher than the rest of the population. The effects of our costly and inefficient health care system reach into all corners of society. A single-payer system has the potential to relieve this strain by creating a coordinated system that is focused on efficiently and affordably caring for all patients.

Further Resources:

• Labor and Health Care Costs
  
• Businesses and Health Care Costs
  
• Municipalities and Health Care Costs
  
• Health Care Providers
• People with Chronic Diseases

Doctors, nurses, medical students, and other health care professionals have a unique perspective on the flaws of our commercial health care system and the advantages that single-payer health care would bring:

Access to and Quality of Patient Care
Americans currently pay enough to fund universal, single-payer health care, but we do not enjoy the benefits. About 33 cents of every health care dollar is currently wasted on profits and high administrative costs before ever reaching a health care provider.

Currently, Americans have poor access to care: in comparison to patients in Canada’s single-payer system, they are less likely to have a regular doctor, more likely to have unmet health needs, and less likely to fill prescriptions. Besides limiting access, the current system also provides a lower standard of care. Many studies have shown that for-profit hospitals, clinics, and long-term care facilities have higher death rates and more reports of poor quality of care. A single-payer system would take these profits and wasteful administrative costs and use them to allow doctors, nurses, and other providers to remove barriers to care and improve patient care and outcomes.

Efficient and Equitable Financing for Providers
In a single-payer system all billing is centralized and taken care of by the government (like the current Medicare system), meaning that providers would not need to act as bill collectors. Instead of spending significant time filling out complicated paperwork that varies for every private insurance company, physicians would bill a single payer that would quickly reimburse them. Providers across all specialties would also be free to negotiate fair salaries and reimbursement rates.

A single-payer system would not only provide comprehensive health insurance to every American so they can afford to seek medical care, but also would reimburse providers simply and fairly for these services. Since everyone is covered, doctors would be able to provide high-quality health care to every patient regardless of ability to pay out-of-pocket, without worrying about losing money or compromising care.

Freedom in Clinical Decision Making
Health care providers are currently told what kind of care they can provide by a myriad of insurance companies that each impose different rules on what services are covered and under what circumstances. This form of managed care is meant to minimize payments, not provide the proven standard of care. In a single-payer system providers and their patients have greater clinical decision-making power to decide what tests or treatments are necessary, constrained by professional standards and not by profit motives.

Health Care Information and Planning
A single-payer model supports comprehensive data collection and analysis, which allows for improved tracking of outcomes, monitoring of progress in eliminating health disparities, and establishing best practice and standard of care guidelines. Much of this valuable information is now lost due to the fragmented nature of data collection by each individual insurance company.

Further Resources:

• “Access to Care, Health Status, and Health Disparities in the United States and Canada: Results of a Cross-National Population-Based Survey,” Karen E. Lasser et al, American Journal of Public Health, July 2006, Vol. 96 No. 7.
• “Costs of Health Administration in the U.S. and Canada,” Steffie Woolhandler et al, New England Journal of Medicine, September 21, 2003, Vol. 349 No. 8.
• “Paying for National Health Insurance - And Not Getting It,” Steffie Woolhandler et al, Health Affairs, Jul/Aug 2002, Vol. 21 No. 4.
• “Payments for care at private for-profit and private not-for-profit hospitals,” P.J. Devereaux et al, Canadian Medical Association Journal, June 8, 2004, Vol. 170 No. 10.
• “Medical Malpractice, Health Care Quality and Health Care Reform,” Gordon Schiff, MD and Oliver Fein, MD, PNHP New York Metro Forum Report #4, May 2003.

As healthcare costs in the United States sky-rocket, traditional employer-based health coverage is eroding. Employers are responding to rising costs by cutting health benefits and increasing employee cost-sharing. The share of firms offering health coverage to their employees has fallen from 69 percent in 2000 to 60 percent in 2007. Most workers with employer-sponsored health coverage are burdened by additional healthcare costs such as annual deductibles and copays. Over 95 percent of covered employees face cost-sharing for non-preventative care such as hospital stays and outpatient surgery.

Half of all uninsured workers are no longer offered coverage by their employers at all. Another quarter of uninsured employees are without health insurance because they do not meet strict eligibility requirements for employer-sponsored coverage. The final 25 percent of employees have opted out of their employer-sponsored health coverage, primarily due to the unaffordable costs of premiums and cost-sharing.

In Massachusetts, employees have faced rapidly rising health care costs in the past five years, as employee contributions to health care plans increase.

^{Data obtained from the Massachusetts Employer Health Insurance Survey, by the Massachusetts DHCFP. http://www.mass.gov/Eeohhs2/docs/dhcfp/r/survey/er_2005_comp_results.pdf}

These trends are expected to continue in the coming years as costs continue to rise. A recent study reported that, of employers who currently provide health coverage to their employees, between 37 percent and 45 percent thought they were “very or somewhat likely” to increase the amount workers contribute to premiums, to increase deductibles, increase office-visit cost-sharing, or increase the amount employees have to pay for prescription drugs in the coming year.

The current health care system in the United States leaves much of the population uninsured or underinsured. Employer-provided health coverage is often expensive and incomplete, particularly as increasing healthcare costs consume larger portions of business’ budgets. A universal single-payer health care plan would remove the burden of costly health care coverage from both employers and employees, and would offer all residents steady, dependable and comprehensive coverage.

Further Resources:

• “Worker’s Health Insurance: Trends, Issues, and Options to Expand Coverage,” Paul Fronstin, Ph.D, The Commonwealth Fund, March 2006.
• “Employer Health Benefits 2007 Annual Survey,” Kaiser Family Foundation.
• “Changers in Employees’ Health Insurance Coverage, 2001-2005,” Kaiser Family Foundation, October 2006.
• “Are You Really Covered?” Consumer Reports, May 2007.

Medicare is the public insurance system providing health care for all Americans over age 65, and Americans with permanent disabilities. It is the only single-payer system in the United States today. Medicare meets an essential need for senior citizens and disabled individuals in the United States. At the time it was enacted in 1965, more than half of elderly Americans were without health insurance. Now Medicare covers nearly 43 million seniors. In addition, Medicare is the most cost-efficient health insurance system in the United States today: it is estimated that Medicare spends between 3 and 5 percent on administrative costs, while administrative costs for private insurance plans are about 2.5 times higher. Costs have grown more slowly for Medicare than private insurance plans: between 1970 and 2000, Medicare spending per enrollee grew at an average of 9.6%, compared to an average of 11% for private insurance companies.

Medicare is being chipped away by privatization efforts. These efforts are making Medicare more expensive for individuals and the government, with little to show for it. The recent passage of Medicare Part D added prescription drug coverage to the plan, but with a built-in “doughnut hole” that only pays for the first $2,510 in drug costs. The enrollee then must pay 100 percent of drug costs until a “catastrophic coverage” level is reached, after which prescription coverage kicks in again. The gap in coverage amounts to about $3,216 in out-of-pocket costs.

Medicare Advantage

In 2003, the Medicare Modernization Act was passed, creating a greater role for private insurance plans known as Medicare Advantage. The theory behind this was that private competition would drive down costs. However, the opposite has happened. The government reimburses Medicare Advantage plans at a higher rate than traditional fee-for-service Medicare. In 2005, Medicare spent an average of $922 more on Advantage enrollees than those in traditional Medicare. Medicare Advantage is also intended to save patients money, but it only does so for those that use few medical services. Sicker patients end up spending more out-of-pocket than they would for traditional Medicare. These patients are also more costly for the private insurance companies, who make an effort to enroll only beneficiaries in good health, leaving traditional Medicare to bear the burden of those enrollees with higher health costs.

Seniors have higher medical costs than the rest of the population, but their incomes are substantially lower. In 2003, people over 65 spent 14 percent of their income on out-of-pocket medical expenses, while those under 65 spent only 2.7 percent. Moreover, credit card debt for those 65 and older doubled between 1992 and 2004. Despite these problems, 73 percent of adults aged 50 to 64 are very or somewhat interested in early enrollment Medicare is the only U.S. model we have for single-payer health care but it is being gradually taken over by private interests. A national single-payer plan must strengthen Medicare, ensure that it is protected, and expand the right to health care to all age groups.

Further Resources:

• “U.S. Seniors Debt Increasing Amid Rising Health Care Costs,” Kaiser Family Foundation, January 2007.
• “The Burden of Out-Of-Pocket Health Spending On Older Versus Younger Adults,” Kaiser Family Foundation, July 2007.
• “Medicare Part D coverage gap,” Kaiser Family Foundation, June 2007.
• “The Cost of Privatization: Extra Payments to Medicare Advantage Plans Updated,” Brian Biles, M.D., Ph.D., Lauren Hersch Nicholas, M.P.P., Barbara S. Cooper, Emily Adrion, M.Sc., and Stuart Guterman, The Commonwealth Fund, November 2006.
• “Medicare Beneficiary Out-Of-Pocket Costs: Are Medicare Advantage Plans a Better Deal?” Brian Biles, M.D., Ph.D., Lauren Hersch Nicholas, M.P.P., and Stuart Guterman, The Commonwealth Fund, May 2006.
• “Will You Still Need Me? The Health and Financial Security of Older Americans,” ara R. Collins, Ph.D., Karen Davis, Ph.D., Cathy Schoen, M.S., Michelle M. Doty, Ph.D., Sabrina K. H. How, and Alyssa L. Holmgren, The Commonwealth Fund, June 2005.
• “Medicare at Forty,” Karen Davis, Ph.D., and Sara R. Collins, Ph.D., The Commonwealth Fund, February 2006.
• “American Health Care: Why So Costly?” Karen Davis, Ph.D., and Barbara S. Cooper, The Commonwealth Fund, June 2003.
• “Comparing Medicare and Private Insurers: Growth Rates in Spending Over Three Decades,” Cristina Boccuti and Marilyn Moon, The Commonwealth Fund, March 2003.

Chronic disease is on the rise in the United States and it currently accounts for 75% of health care expenses each year. The United States compares poorly with other industrialized nations in chronic disease management, especially when it comes to asthma and diabetes. In 2000, the United States had the 3rd highest diabetes death rate among OECD countries. Among developed nations, the United States has the second-highest hospital admission rates due to asthma, which is a marker of poor asthma management. In addition, 11% of diabetes patients in the United States were uninsured in 2000, and as a result received fewer preventative services.

People with chronic disease have more health care needs than the average patient and therefore are financially punished for their illnesses in private employer-based health insurance plans. Over 90% of insured diabetics spend more than $1,050 annually on their care, and more than 50% spend at least $5,000. Single-payer health insurance systems remove extra financial burden from chronically ill patients by eliminating co-pays and deductibles. This system will help encourage preventative care, which is crucial in managing chronic disease and saves money for everyone in the long run. See below for more information about chronic disease in the United States.

Further Resources:

• “Chronic Disease Overview,” Centers for Disease Control and Prevention, March 20, 2008.
• Financial Burden of Diabetes, “Consumer-Directed Healthcare: Except for the Healthy and Wealthy It’s Unwise,” Steffie Woolhandler and David U. Himmelstein, Journal of General Internal Medicine, June 2007.
• International Comparison of Death Rates Due to Diabetes, OECD Health Data, 2006.
• “The Association between Health Insurance Coverage and Diabetes Care,” Karin M. Nelson et al, Health Services Research, April 2005.
• International Comparison of Asthma Admission Rates, “Health at a Glance 2007,” OECD Health Data.

The financial stability of municipalities in Massachusetts and nationwide is being threatened by rapidly rising health care costs. Cities and towns are being thrown into crisis as they struggle to provide benefits for hard-working city employees such as firefighters, policemen, and teachers. In Massachusetts from 2001 to 2005, employee health care costs as a share of total municipal budgets increased from 7.4% to 11%. Overall, municipal health care costs rose by a total of 99% from 2001 to 2007. At the same time, local budgets increased by only 28%. In Boston, employee health care costs increased by 92% from 2001 to 2007 while all other operational spending increased by only 18%. This drain on budget resources is preventing cities and towns from maintaining other important services.

The dilemma of municipalities in Massachusetts is exacerbated by Proposition 2½, which limits the annual increase in property taxes to 2.5 percent, regardless of how fast municipal costs are rising. In 2007, health cost increases consumed approximately three-fourths of the revenue from the 2.5 percent property tax increase outlined in Proposition 2½. Municipal tax data from 2003 to 2006 saw a marked increase in the percentage of total tax revenue used for health care costs.

One strategy to combat rising costs was used by Springfield, MA when in 2003 they began allowing city employees to buy cheap prescription drugs from Canada. If health care costs continue to increase by 11-13% annually, they are predicted to consume 19-23% of municipal budgets by 2018. Single-payer health care would free municipalities from the burden of insuring their workers, while at the same time creating a healthier workforce. Single-payer is already being recognized as a solution by mayors nationwide. At their 2008 Annual Meeting, the U.S. Conference of Mayors endorsed HR 676, the national single-payer bill.

FURTHER RESOURCES:

• “A Mounting Crisis for Local Budgets: The Crippling Effects of Soaring Municipal Health Costs,” Massachusetts Taxpayers Foundation, July 19, 2005.
• “MA Health Care Costs Continue to Stress Local Finances,” Massachusetts Municipal Association, October 1, 2007.
• “Municipal Health Reform: Seizing the Moment,” Boston Municipal Research Bureau, August 2007.
• “Springfield Institutes a Drug Reimportation Program,” Drug Cost Management Report, August 8, 2003.
• “Proposition 2½ Resource Area,” Massachusetts Municipal Association.

The burden of health care costs on businesses is substantial and rising rapidly. Between January and May 2004 alone, the costs of providing health care for workers increased by 11%. Between 2000 and 2005, premiums for employer-based insurance rose at least 9% each year, a rate of increase 2 to 3 times faster than inflation and workers’ wages. Companies are suffering because of these cost burdens. General Motors, which has historically offered one of the most generous benefits package of any corporation, spent approximately $5.6 billion on employee health benefits in 2005, at a time when they suffered their worst quarterly loss in a decade. Health care costs add about $1500 to the price of each car GM sells.

The significant rise in health insurance premiums within the past five years has led to dramatic increases in the amount Massachusetts employers must spend on employee health care costs annually.

_{Data obtained from theMassachusetts Employer Health Insurance Survey by Massachusetts DHCFP http://www.mass.gov/Eeohhs2/docs/dhcfp/r/survey/er_2005_comp_results.pdf}

Employer-sponsored coverage has traditionally been the main source for health insurance in the US, but this relationship is weakening. In 2005, 77% of employees received benefits from their employer, down from 81% in 2001. Most of the employees that lost coverage during that time remained uninsured. Uninsured individuals are at risk for poorer health and premature death. Universal single-payer coverage offers several advantages to businesses. It will reduce costs for businesses that are currently providing insurance and also eliminate retiree benefit costs. Businesses will no longer have to negotiate with insurance companies or labor unions about health coverage. National coverage will free up more money for consumer spending and also create a healthier, more productive work force. Health care costs will be controlled and predictable, and businesses would no longer lose employees to those companies offering better benefits.

FURTHER RESOURCES:

• “Single-Payer: Good for Business,” Morton Mintz, The Nation, October 28, 2004.
• “Changes in Employees’ Health Insurance Coverage, 2000-2005,” Kaiser Family Foundation, October 2006.
• “Ailing GM looks to scale back generous health benefits,” Julie Appleby and Sharon Silke Carty, USA Today, June 23, 2005.
• “Workers’ Health Insurance: Trends, Issues, and Options to Expand Coverage,” Paul Fronstin, Commonwealth Fund, March 28, 2006.

Young adults, ages 19 to 29, are more likely to be uninsured than any other age group, and are the fastest growing uninsured population in the country. In 2004 young adults represented 17 percent of the non-elderly population, but 30 percent of the uninsured. They also accounted for 40 percent of the growth in uninsured people between 2000 and 2004. Young adults often fall off of their parents’ health plans with no alternative source of coverage, disproportionately work at low-income jobs classified as part-time or temporary that offer no health benefits, and have seen falling real incomes in recent decades making this age group less able to afford commercial insurance. While often discounted as a relatively healthy population, young adults have special health care needs. For example, one third of all HIV diagnoses are made among young adults, injury-related visits to emergency departments are far more common among this group, they have seen the fastest growing rates of obesity, and 3.5 million out of 21 million women ages 19 to 29 each year become pregnant.

A health care system based on workplace coverage and ability to pay discriminates heavily against young adults, who are increasingly disadvantaged in the labor market and have seen falling real incomes in the United States. A universal single payer health care system would make comprehensive access to health care available, regardless of age, job status, or income.

Further Resources:

• “Rite of Passage? Why Young Adults Become Uninsured and How New Policies Can Help,” The Commonwealth Fund, May 24, 2006.
• “On their Own: Young Adults Living Without Health Insurance,” The Commonwealth Fund, May 1, 2000.
• “The Changing Definition of ‘Dependent’: Who is Insured and For How Long?” National Conference of State Legislatures, February 2008.
• “Young and Uninsured,” Wiretap Magazine, November 23, 2005.
• “Young adult plans limit coverage: State’s low-cost insurance can be risky, report says,” Boston Globe, May 29, 2007.
• “Young adults aren’t sold on health law: Options weighed as plan takes effect,” Boston Globe, July 1, 2007.