BOSTON -- Critics say the law making Massachusetts the first state to guarantee universal access to health care could bankrupt businesses and hospitals, but supporters call it a long overdue extension of a basic right.
The plan, which was approved Wednesday by the Legislature and will be phased in over four years, targets an estimated 600,000 people, most of them working poor who do not have employer insurance or private coverage.
It will ensure that all residents -- including full-time students and the unemployed -- can obtain health insurance through premiums tied to their ability to pay.
Passage is seen as a welcome prize for Gov. Michael Dukakis, who lobbied nine months for the bill amid presidential campaign questions about his compassion and his effectiveness as a manager.
'It's about time all citizens in this commonwealth have the basic security and guarantee of health insurance for themselves and their children,' said Dukakis, who was uncertain whether he would sign the measure before next Tuesday's New York Democratic presidential primary.
'I'm very proud of the fact that Massachusetts will be the first state in the nation to ever have legislation which will guarantee basic health insurance to all of our citizens, something which is long overdue for Massachusetts and long overdue for our country,' the governor said.
Passage ended a marathon session and yearlong debate that focused largely on the question of whether the mandated costs to business of the health insurance program would turn the state's economic boom into a bust.
The Senate Ways and Means Committee has estimated the cost at about $660 million over the next four years, while others have put the cost at more than $1 billion.
'I feel that the health care bill will end up as a multibillion-dollar problem,' said Rep. Gregory Sullivan, a Democrat who voted against it. 'The cost of funding this should be borne by all citizens rather than small businesses.'
The law will require virtually all firms with more than five employees to provide group medical insurance plans by the year 1992 or pay a surcharge on their state unemployment taxes. The surcharge will be 12 percent of the first $14,000 of an employee's wages -- or $1,680 a worker. The insurance payments would be the same.
Businesses that participate in the plan will get certain tax benefits, including state income and excise tax credits equaling 20 percent of its health insurance premium the first year it offers a plan.
Critics say it is not known how much the program will cost and predict the financial burden will kill some businesses.
'Many businesses are going to go under, and many of those who are employed are going to be unemployed,' warned Republican Sen. Argeo Paul Cellucci.
Assistant Senate Minority Leader David Locke denounced the bill as 'part and parcel of a conspiracy that has gone on for years to eliminate the practice of medicine in this commonwealth.'
The law will pump nearly $1 billion in revenues into the financially ailing Massachusetts hospital industry. Hospitals will be allowed revenue increases of $289 million the first year, $262 million the second year and $195 million in each of the third and fourth years.
Forty-two small hospitals categorized as 'underfinanced' will receive revenue increases of $55 million in the first year and a $40 million in the second year of the law. Some small hospitals were not included in that funding category and face certain financial problems, legislators said.
'I am an ardent supporter of the concept, but we will find that this program will need a good amount of work and additional amendments so as not to put small businesses out of business or hospitals in financially disastrous positions,' Rep. Marjorie Clapprood said.
Sen. Patricia McGovern, a Democrat and chief architect of the plan, said states that share Massachusetts' economic profile are closely watching what happens to the universal health care measure.
'There was a time when the concept of Social Security was viewed with great skepticism, but today we cannot imagine a America without it,' she said. 'Universal health care will soon be held in the same high regard here in Massachusetts.
'Is health care a right or a privilege? Massachusetts has gone on the record as saying yes, it is clearly a right.'