Boston Lawmakers overwhelmingly approved a bill Tuesday that would make Massachusetts the first state to require that all its residents have some form of health insurance.
The plan - approved just 24 hours after the final details were released - would use a combination of financial incentives and penalties to dramatically expand access to health care over the next three years and extend coverage to the state's estimated 500,000 uninsured.
If all goes as planned, poor people will be offered free or heavily subsidized coverage; those who can afford insurance but refuse to get it will face increasing tax penalties until they obtain coverage; and those already insured will see a modest drop in their premiums.
The measure does not call for new taxes but would require businesses that do not offer insurance to pay a $295 annual fee per employee.
The cost was put at $316 million in the first year, and more than a $1 billion by the third year, with much of that money coming from federal reimbursements and existing state spending, officials said.
The House approved the bill on a 154-2 vote. The Senate endorsed it 37-0.
The only other state to come close to the Massachusetts plan is Maine, which passed a law in 2003 to dramatically expand health care. That plan relies largely on voluntary compliance.
The plan hinges in part on two key sections: the $295-per-employee business assessment and a so-called "individual mandate," requiring every resident who can afford it to obtain health insurance or face increasing tax penalties.
Liberals typically support employer mandates, while conservatives generally back individual responsibility.
"The novelty of what's happened in this building is that instead of saying, 'Let's do neither,' leaders are saying, 'Let's do both,"' said John McDonough of Health Care for All. "This will have a ripple effect across the country."