AG Coakley: Massachusetts' Experience Supports Federal Basis for Passing National Health Care Reform
Argues Results Of Massachusetts Health Care Reform Demonstrate Benefits Of Reducing
Massachusetts' health care reform law served as a blueprint for the PPACA. In her brief, the Attorney General argues that the successful results from the Massachusetts law enacted in 2006, including a reduction of the number of uninsured people utilizing the "free-care" pool (so-called "free riders"), demonstrate that Congress had a rational and constitutional basis to enact an individual coverage requirement in PPACA.
"Massachusetts is uniquely positioned to show the benefits of health care reform on a national level," said Attorney General Coakley. "We have insured 97% of our people, and that has resulted in a significant decrease in state spending on 'free care' for the uninsured. The benefits of health care reform in Massachusetts - passed with overwhelming bi-partisan support - are a clear demonstration of the basis by which Congress chose to address the health care crisis on a national level."
Under PPACA, the federal health care reform legislation that was approved by Congress last year, those who can afford it are required to maintain a minimum level of health insurance or pay a tax penalty for failing to do so. In Commonwealth of Virginia ex. rel. Cuccinelli v. Sebelius, a federal court in Virginia ruled that Congress did not have the power under the Constitution to implement this minimum essential coverage provision. The Virginia court concluded that the failure to buy health insurance is not economic activity subject to Congressional regulation.
The federal minimum essential coverage provision at issue in this case is modeled on a similar provision in Massachusetts law, which requires most Massachusetts residents to obtain health insurance. Based on Massachusetts' experience, AG Coakley argues that preventing healthy people from foregoing health insurance until they are sick or injured (a practice referred to as "free-riding"), generates substantial economic benefits.
According to the Attorney General's brief, Massachusetts' experience with health care reform demonstrates that Congress had a rational basis for concluding that free-riding by individuals, taken in the aggregate, has a substantial effect upon commerce, and that reducing or eliminating free-riding will benefit the health insurance market as a whole.
Among the tangible benefits of health care reform in Massachusetts cited in the Attorney General's brief include:
- An increase in the number of insured residents to more than 97% of the state's population in 2009, up from 87.5% in 2006, giving Massachusetts the lowest rate of uninsured residents in the country;
- The gains in Massachusetts residents with health insurance spurred a corresponding sharp decline in the amount of state spending on "free care" for the uninsured and underinsured. The costs of free care dropped from $709.5 million in fiscal year 2006 to $414 million in fiscal year 2009.
Moreover, the Attorney General argues that despite Massachusetts's intrastate success in improving access to quality health care and reducing spending on "free care," national health care reform, such as that embodied in the ACA, is required to grapple with interstate (and international) health care trends that individual states - acting alone - have little power to influence.
Assistant Attorneys General Daniel Hammond, Emiliano Mazlen, Thomas O'Brien, and Sarah Ragland, and Policy Analyst Merritt Dattel McGowan, assisted in the drafting of the AG's Brief.