Taking Massachusetts National
Posted by benarmstrong on 2/14/2009 7:15:35 PM.
This policy was first proposed by Jonathan Gruber, The Brookings Institution and the Hamilton Project.
Level of Government: National
Status: Proposed

Abstract
Background:
In the summer of 2008, the Hamilton Project and the Brookings Institution jointly proposed a plan to institute the principles of the Massachusetts state health care system at the federal level.  The plan is part of the Hamilton Project’s series of health care and financial ideas intended to foster fiscal discipline and offer public investment targeted to growth-oriented areas of the economy.  The author, Jonathan Gruber, was an architect of the Massachusetts plan and is a professor at MIT.
Purpose:
To create a system for health care purchase and provision that enables all Americans to access affordable health care through health insurance
Plans:
The plan envisions the following program, reflecting the Massachusetts health care model at the national level. It seeks to move away from a system grounded firmly in employer-sponsored insurance.
Mandate: The plan would require all Americans to purchase health insurance and verify their coverage on yearly tax forms. Those who remain uninsured will be fined commensurate to the cost of insurance.
Subsidies: The plan maintains state subsidies for health insurance through Medicaid and SCHIP at a constant level, approximately for children at or below 200% of the Federal Poverty Level (FPL) and adults at or below 100% of the FPL.
Pooling: Low-income individuals uncovered by employer-sponsored insurance (ESI) would join state pools for subsidized insurance. Those participating in the pool are limited to spending only a certain percentage of their income on health insurance. The plan will allow low-income individuals who have access to ESI, but cannot afford it, to bring their employer contributions with them and join the low-income subsidized pool. For mid- and high-income individuals, the plan would establish state HealthMarts. Comparable to the Commonwealth Connector health insurance market in Massachusetts, HealthMarts will allow individuals over 400% of FPL to select a health insurance package from three levels of benefits.
Resources:
Gruber estimates the cost of the plan at $131 Billion. He argues that eliminating the tax subsidies for employers who sponsor insurance, raising $168 Billion in first year revenue, would be one way to finance the plan.

Policy Details
Gruber proposes that the federal government remove the tax subsidy for employers that subsidy employee coverage, raising $168 Billion in the first year.  The plan's estimated cost is $131 Billion per year.  Other tax increases or spending cuts are offered as alternative funding measures.
The plan requires that everyone purchase health insurance, lest they be heavily fined.  The persistently uninsured will incur a penalty equal to their cost of insurance.
The details of the pricing strategy are determined on the state level.  Risk pools are separated for low-income individuals and middle- and high-income individuals.  In other words, there is a pool for those under 400% of the FPL and a pool for everyone else.  The low-income pool caps the percentage of income that any individual can spend on insurance.  The high income pool offers variably-priced benefit packages through state health care markets.
Middle- and high-income individuals may purchase health insurance through state HealthMarts which are modeled to reflect the Commonwealth Connector insurance market.
 The level of insurance subsidies remain the same at the state level.
Related Links
"Take MA National" Policy Brief: The Brookings Institution and the Hamilton Project offer a paper outlining national policy reforms that reflect the state-based MA healthcare reform package. This document does not focus on the background of the issue as much as the specific proposal.
"Take MA National" Full-text Article and Justification: This policy paper, while omitting the details of reform, provides a comprehensive background of the nation's current healthcare problems and a justification for the specific reforms offered in the policy brief. The article also simulates the plan's cost and simulates how it would function.

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