Health Policy on the Ballot – Massachusetts Election, November 2022

By Erin Mooz, Ann Nguyen, Aditi Vaidya, and Signe Flieger

There are four questions on the statewide Massachusetts ballot this year, each of which have public health implications. 

Question 1: Additional Tax on Income Over One Million Dollars

Summary: A yes vote would amend the state constitution to add an additional 4% state income tax (increasing from 5% to 9%) on “that portion of annual taxable income” in excess of $1 million. Revenues from this “Millionaire’s Tax” or “Fair Share Amendment” would be used for public education, public colleges and universities, and the repair and maintenance of roads, bridges, and public transportation. 

Annual Taxable income includes earned and unearned income: salaries, wages, tips, commissions, interest, dividends, capital gains. In other words, what currently counts as income would not change. 

Implications of a Yes Vote for Public Health

• Increase funding for necessary services: The Center for State Policy Analysis at Tufts found that the tax would raise approximately $1.3 billion for the state in 2023. Those funds would go toward health promoting services, like education and transportation. Education improves public health and promotes health equity. Improving transportation infrastructure will make commuting safer and investing in public transportation will improve health by decreasing air pollution and making vital services such as medical care, healthy food, and employment more accessible. 
• Reduce income inequality: Massachusetts has one of the highest levels of income inequality in the country and it is one of 14 states that currently has (or is implementing) a flat tax system. The additional 4% surtax for the wealthiest households will shift the state’s tax system to a more progressive and equitable tax system.

Who is Impacted? Some people have expressed concern about who would be impacted by this increased tax. Estimates suggest that fewer than 7 out of every thousand households earn over $1 million in taxable income. Another worry is the potential impact of home sales – but keep in mind, when someone sells their home, they are taxed on the capital gains – essentially the difference between what you sold your home for and what you bought it for, plus all the improvements you made over time, and a tax exemption of $250k or $500k depending on whether you are single or married. Recent analyses suggest that in 2021, only 895 home sales across the Commonwealth would have potentially triggered this higher tax rate, and the average sale price for those homes was more than $3.7 million. 

For more information about the Fair Share Amendment, visit the Massachusetts Budget and Policy Center. 

Question 2: Regulation of Dental Insurance 

Summary: A yes vote would mandate dental insurance companies to spend at least 83% of premiums on member dental expenses and quality improvements as opposed to administrative expenses, marketing, and profits and require carrier rates be approved by the Division of Insurance. 

Implications of a Yes Vote for Public Health

The implications for public health are a bit more complicated here. It is unclear how close dental insurers currently are to the 83% requirement. One analysis suggests that in 2019 and 2021, the three largest dental insurers paid out claims equal to 76% of total premiums. Relatedly, according to advocates of this initiative, on its own 2019 Form 990, Delta Dental in Massachusetts paid executive bonuses, commissions, and payments to affiliates equal to $382 million, while only paying $177 million for patient care.

• Medical Loss Ratio (MLR) Applied to Dental Insurance: This law is novel in its application to dental insurance but has a historical foundation in medical insurance. The Affordable Care Act enacted Medical Loss Ratio (MLR) provisions to provide better value to consumers and increase the proportion of total premium dollars going toward medical care. A Medical Loss Ratio is essentially the percentage of total premium dollars that must be spent on medical care. In the ACA the Medical Loss Ratio is 80% for insurance companies that cover individuals and small businesses and 85% for large group plans. Like the ACA, if this ballot measure passes, dental insurance companies will be required to send rebates to consumers for premium amounts in excess of the Medical Loss Ratio.
• Greater Transparency in Dental Insurance: In contrast to medical care, we know relatively little about the dental insurance market. The passage of Question 2 would involve a variety of reporting requirements that would assist in refining future regulations and provide more robust information on what percentage of total premiums are being paid out for claims. These provisions would enable the Division of Insurance to have more oversight of the dental insurance landscape. 
• Could the Pie Get Bigger: Patterns from the Medical Loss Ratios in the ACA also suggests that carriers may aim to increase the overall size of the pie to maximize potential profits flowing to the insurance companies, thus still meeting the Medical Loss Ratio threshold, but not resulting in savings for consumers. However, the language of the law disallows increases above the consumer price index without state approval. Still, the opportunities for actual consumer savings here are unclear. 

Who is Impacted? Some are concerned that meeting this threshold may be harder for smaller insurers. Additionally, self-funded plans offered by larger employers would not be subject to this requirement.

Question 3: Expanded Availability of Licenses for the Sale of Alcoholic Beverages

Summary: This proposed law would 1) increase the number of liquor licenses that any one retailer could own, 2) prohibit “self-checkout” for alcohol, 3) modify fines to be based on total gross profits on all retail sales vs. gross profits on the sale of alcoholic beverages only, and 4) allow out-of-state licenses as a form of identification to purchase alcohol. 

Implications of a Yes Vote for Public Health

• Greater Oversight of Alcohol Sales: “Enhanced enforcement” of laws prohibiting the sale of alcohol to minors is a CDC community strategy for reducing excessive alcohol use. This law could improve enforcement through both raising the stakes of the fines for stores that violate the rules, such as by selling alcohol to minors, and prohibiting self-checkout for alcohol. 
• Increased Access to Alcohol: There’s a consensus that decreasing alcohol density reduces the public health impact of excessive drinking. While it may seem that allowing grocery stores to also sell alcohol may increase alcohol purchasing points, it may be true that it is difficult for smaller liquor stores to compete with these larger retailers and thus allowing them to sell alcohol may actually decrease alcohol density. Additionally, a study based in Finland found that supermarkets selling alcohol did not result in decreased spending on food, reducing concern that having more alcohol sold in grocery stores might impact the spending breakdown between food and alcohol. 

Who is Impacted? The updated fee formula would have a greater impact on retailers that sell more than just alcohol (i.e., grocery stores), as the fine would be equal to a percentage of overall sales rather than just alcohol sales. Additionally, the increased prevalence of liquor licenses may alter the retail environment and create a landscape in which it is harder for smaller liquor stores to be competitive. Consumers would gain convenience through the use of out of state licenses as sufficient identification and increased choice in where to purchase alcohol, but would lose the ability to do so at self-checkout. 

Question 4: Eligibility for Driver’s Licenses 

Summary: This law allows Massachusetts residents who cannot provide proof of lawful presence in the US to obtain a standard driver’s license or learner’s permit if they meet all other qualifications including a road test and insurance, and provide proof of their identity, date of birth, and residency. Importantly, this ballot question is asking voters whether they should maintain this law that was passed by the legislature this year. A yes vote keeps the law that was passed in place.

Implications of a Yes Vote for Public Health 

• Safer Roads: Preserving this law, which is already in place in 17 other states, diminishes hit and run accidents and allows all community members to get to school, the doctor, and other essential places. Connecticut saw a 9% decrease in hit and run accidents between 2016 to 2018 after it allowed undocumented immigrants to obtain driver’s licenses. Other states that have implemented this policy have found large drops in uninsured drivers – by 80% and 60% in Utah and New Mexico respectively. 
• Improved Health: Allowing access to driver’s licenses improves preventive health outcomes for children of immigrants and also reduces the number of adults who experience poor physical and mental health. Access to a driver’s license can reduce barriers that families face in accessing good jobs, health services, and public programs, and enhance engagement in essential activities, such as going to the market or pharmacy. Anti-immigrant policies have been shown to harm Latino communities regardless of immigration status, thus policies such as eligibility for driver’s licenses can begin to address upstream drivers of health inequities. 

Who is Impacted? Keeping this law in place will enable undocumented individuals and communities greater access to necessary resources and improve the safety of our roads. It will increase vehicle-related spending and also generate state revenue through additional motor vehicle excise taxes, collections from tolls, and fees from licenses, inspections, and other services. This law will enable law enforcement professionals to be more efficient through reducing unnecessary arrests. 

Want to learn more? For a deeper dive into each of these ballot questions, check out the Tufts Center for State Policy Analysis Voters’ Guide to 2022 Massachusetts Ballot Questions.