THURSDAY’S DECISION by the Supreme Court to uphold the 2010 federal health care law, by a 5-4 vote, is a victory for the health and financial security of Americans. With the mandate in place, the federal government can implement key insurance reform provisions that ensure that America will no longer be a country where individuals can be excluded from health insurance coverage because they are, have been, or will be ill.
This decision allows the Affordable Care Act to move forward to provide insurance coverage to more than 30 million Americans, to control the costs and improve the quality of US health care, and to lower the budget deficit. Congratulations to the tens of millions of uninsured Americans, the tens of millions more who face the risk of becoming uninsured, and the hundreds of millions who will ultimately benefit from a less expensive and higher quality health care system.
This should also be a moment of tremendous pride for the Bay State. Our 2006 health care reform legislation was the basis for the Affordable Care Act in two ways. First, the “three-legged stool” that we pioneered here — ending insurance market discrimination, ensuring broad insurance market participation through an individual mandate, and providing subsidies so that insurance is affordable — became the basis for the federal law.
But more importantly, we showed that such a law works. Since its enactment, the state has covered two-thirds of its uninsured citizens and halved the cost of insurance in the non-employer market — with broad public support. Without this strong base of evidence that the “three-legged stool” could work, it never would have been adopted nationally.
But if we are to realize for the nation as a whole the types of gains we have seen in Massachusetts, the state must continue to lead. Part of that leadership means recognizing with some humbleness how we got here. Massachusetts was only able to pass our pioneering law because of enormous federal funding that paid more than half the costs of expanding insurance access. To suggest that other states simply follow our lead, but not to provide them the financial advantage that Massachusetts had in making this move, is simply disingenuous. (I’m talking to you, Governor Romney.)
That leadership also requires explaining to the rest of the country why our model works so well. It works because we have broad agreement that business, individuals, and the government should work together to craft an insurance system that works for all citizens. Businesses in Massachusetts have not abandoned health insurance coverage because of health reform; indeed, employer-sponsored insurance has grown much more rapidly here than in the rest of the nation since 2006. Individuals who were previously uninsured have contributed by buying insurance, often at the newly affordable rates provided by the state’s Health Connector. And the government has contributed by providing low-cost insurance alternatives for the poor, through its Commonwealth Care Program, and for everyone else, through the connector.
Most importantly, it has succeeded because we have a broad acceptance that the right to non-discriminatory health insurance requires the responsibility of purchasing health care coverage. We saw firsthand in Massachusetts what happens when the government tries, as we did in 1996, to end discrimination in insurance markets without a mandate: Prices in our individual insurance market skyrocketed (so that we were by far the most expensive in the nation), and the market virtually collapsed. By all agreeing that all are responsible for insuring their health care costs, we have fixed this problem and created a vibrant and much less expensive individual market.
This broad acceptance will not be so easy to come by in other parts of the nation. That is why it is incumbent on our state to explain why this isn’t some kind of “government takeover” or “socialization” of the medical care system. This is simply bringing to bear the principles of the “social contract” laid out by John Locke so many years ago. We should work together to make sure that the health insurance system works for all, not just for those privileged with sufficient income and health to have access to insurance coverage.
Jonathan Gruber is an economist at MIT. He advised both Governor Romney and President Obama on health care law.