What M4A & PACT 3.0 Mean for the Future of Healthcare in Mass.
On November 14th, the Joint Committee on Health Financing will hear two bills on single-payer healthcare. An Act Establishing Medicare for All in Massachusetts (HB1239/SB744) would create a single-payer system that would guarantee health care access to all residents in the Commonwealth. 71% of surveyed residents believe that the state should play a major role in health equity; this legislation echoes similar bills proposed around the country. In this week’s blog, we look at the history of Medicare for All in Massachusetts and the current legislation before the committee.
HB1239/SB744 - An Act establishing Medicare for All in Massachusetts
An Act establishing Medicare for All in Massachusetts would overhaul the current healthcare system in the Commonwealth. If passed, the legislation would establish the Massachusetts Health Care Trust, which would act as the single-payer body that manages funds to provide health care services. It would also establish eligibility criteria for providers and participants, the enumeration of covered benefits, and provisions relative to wraparound coverage for federal health programs. HB1239/SB744 would create an employer payroll tax of 7.5% after the first $20,000 of payroll and a 2.5% payroll tax on employees after the first $20,000 of payroll. A payroll tax of 10% would be imposed on self-employed individuals after the first $20,000 of payroll, and a 10% tax on unearned income (dividends, capital gains, rent, and profits) after the first $20,000.
According to Mass-Care, the bill would lower health care spending by $48.42 million during the first year of implementation and have 98% of families spending less on health care than they do now.
Background
In 2022, 20 House districts across Massachusetts voted on a ballot measure calling for Medicare for All. Mass-Care, the organization campaigning to establish a single-payer health care system in Massachusetts, put the non-binding question on the ballot, which passed in all 20 districts.
There are 61 co-sponsors of HB1239/SB744 between the House and Senate. Of those legislators, eight represent districts that approved Medicare for All on the 2022 ballot question:
Rep. Farley-Bouvier (2nd-Berkshire)
Rep. Shirley Arriaga (7th-Hampden)
Rep. Susannah Whipps (2nd-Franklin)
Rep. Sean Garballey (23rd-Middlesex)
Rep. Marjorie Decker (25th-Middlesex)
Rep. Sam Montaño (15th-Suffolk)
Rep. Steven Ultrino (33rd-Middlesex)
Rep. Christine Barber (34th-Middlesex)
While the results of the 2022 ballot question seem promising for supporters of Medicare for All in the Commonwealth, the reality is that the policy has a history of not moving through the legislature. Since 2011, a single-payer healthcare bill has been introduced seven times and was given a study order four times. A study order means the joint committee that reported on the bill is authorized to sit during recess and study the measure further. The committee files a narrative report of their findings, but most bills that are given a study order do not see further action.
This fate for single-payer healthcare bills is not limited to Massachusetts, as these proposals often face a difficult path to passage in state legislatures. One challenge for single-payer healthcare bills is agreeing on a reliable way to pay for the program. To fund the single-payer system states would need to apply for waivers to redirect funds from Medicare, Medicaid, and the Affordable Care Act. The U.S. Department of Health and Human Services holds great discretion to approve or deny a state’s request for the funding, meaning the state must come up with a fallback plan. States that introduce single-payer bills would have to redirect employer-sponsored health plans that cover 49% of Americans. In 2021, about 64% of insured individuals in Massachusetts were covered by employer-sponsored plans.
There are currently eleven other states that have some version of single-payer healthcare in their legislature. States such as California have bills that enumerate the intent of the legislature to establish a single-payer system. Others, like Maine, have introduced bills that would establish a single-payer system for individuals19 years old and younger. Vermont, Rhode Island, New York, New Jersey, Minnesota, Ohio, Colorado, Oregon, and Michigan also have bills on the docket regarding single-payer healthcare systems.
Massachusetts residents have differing types of healthcare coverage according to a 2021 survey. Over half of the respondents stated that they were covered by employer-sponsored plans, while 13.6% said that they were covered by Medicare. 16.6% were insured by MassHealth or ConnectorCare: MassHealth is Massachusetts' Medicaid program and ConnectorCare is subsidized health insurance offered to individuals who do not qualify for MassHealth. 2.6% of insured residents responded that they have private, non-group coverage.
SB2499 - An Act relative to pharmaceutical access, costs and transparency
The legislature has also moved an Act Relative to Pharmaceutical Access, Costs and Transparency (SB2499) in the Orders of the Day for November 15th. If passed, the bill would establish a comprehensive framework to regulate drug prices, pharmacies, and pharmacy benefit managers. Comprising of 71 sections, the omnibus bill would require pharmaceutical companies to provide the state’s Health Policy Commission (HPC) and the Center for Health Information and Analysis (CHIA) with early notice for pipeline drugs, and require the Commission to review the impact of eligible drug costs on patient access. The legislation would also establish and regulate a drug access program under the Executive Office of Health and Human Services to enhance access to targeted high-value medications used to treat chronic illnesses. If SB2499 receives an unfavorable committee report in the Orders of the Day, it signifies that it will not be considered again this legislative session.
Background
The HPC and CHIA were created after the Romney health reforms which increased access to healthcare and insurance, but drove up costs. The two oversight bodies were tasked with collecting data from the health industry, particularly regarding spending, and trying to drive down costs over the long term. Notably, their oversight was largely restricted to doctors, hospitals, and health insurers.
SB2499 wants to expand HPC/CHIA oversight to pharmaceutical manufacturers and pharmacy benefit managers (PBMs). This will include requirements that drug manufacturers notify HPC of certain drugs coming to market, planned increases in prices, etc. The bill also establishes a HPC drug price review process where HPC can determine that a drug is not priced in a way that is consistent with its value to patients. The HPC would also be able to request that the manufacturer enter into an access and affordability improvement plan.
This bill also argues that pharmacy benefit managers, the middlemen of the drug supply chain, provide no value in the transaction between the pharmaceutical manufacturer and commercial pharmacy. Therefore, SB2499 writes an entire new chapter into the General Laws to set up a licensure regime for PBMs. Insurers will be prohibited from contracting with unlicensed PBMs and theoretically, subject them to increased scrutiny.
The drug access objective of SB2499 is to cap cost sharing on some drugs for a number of common chronic conditions (diabetes, asthma, heart conditions, etc.). To accomplish this, the bill sets up a process where for each identified chronic condition, insurers have to pick two drugs (one generic and one brand name). Generic drugs under this reduced cost sharing program are supposed to have no cost sharing at all (i.e.: insurers pay everything; free for the patient) while name brand drugs are allowed to have co-pays of up to $25.
Lastly, included in SB2499 is a Prescription Drug Cost Assistance Program which will help people pay for drugs for certain chronic conditions, but eligibility is restricted to people who aren’t on MassHealth and earn less than 500% of the federal poverty level.
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