April 5 (Bloomberg) -- Massachusetts lawmakers approved a first-in-the-nation bill yesterday requiring all residents to have health insurance, a measure Republican Governor Mitt Romney said he will sign.

Under the bill, the state would offer subsidies to private insurers to cover more low-income families. Companies with more than 10 workers that don't offer health insurance to their workers would pay $295 to the state for each worker, money that will be used to subsidize the health insurance of others.

The bill may serve as a model for other U.S. states that are seeking ways to provide health care for the uninsured, said Philip J. Edmundson, chief executive officer of William Gallagher Associates, an insurer. Some 16 percent of Americans are currently without health coverage.

``I don't think we've seen any other state where virtually every Democrat and Republican voted for a measure of this sort,'' said Richard Cauchi, health analyst for the National Conference of State Legislatures in Denver, in a telephone interview.

While at least eight other states have bills calling for universal health coverage, Cauchi said, Massachusetts is the first to propose requiring individuals to buy coverage. Residents who can afford insurance and don't purchase it would face income tax penalties after July 2007.

``We're looking for every single person to be covered,'' said Romney in an interview. The governor is considering a run for president in 2008.

Hawaii

Hawaii is currently the only state that requires businesses to provide health insurance. California in 2003 passed a law that would require the largest employers to pay for health care, only to see it overturned in a referendum backed by business groups critical of the law.

The state's House of Representatives approved the measure in a 155 to 2 vote. It passed the Senate unanimously.

Romney, 59, said his staff is going through the bill now and while he intends to sign it, he may exercise his right to a line-item veto.

Some people who have been able to afford insurance yet have chosen to skip it and instead use emergency rooms at hospitals will now have to take responsibility for their health care, as will business owners who have refused to provide care for their employees, said state Senator Marian Walsh, a Democrat.

``It combines, in a way that's never been attempted or discussed in any other state, joining employee and individual responsibility,'' said John McDonough, executive director of Health Care for All Massachusetts, a Boston-based health advocacy group, in a telephone interview. ``It's combining an individual mandate with an employer mandate.''

Under Pressure

The legislation was passed under pressure from the federal Centers for Medicare and Medicaid Services. They said they would cut off about $385 million a year in funding for care of the poor if the state didn't enact reforms by July 1.

The bill follows decades of attempts to reform the state's health-care system. A 1988 law that passed by 2 votes and was signed into law by then-Governor Michael Dukakis was never implemented. Today, of the 6.4 million people in the state, about 500,000 lack insurance.

The bill will help businesses that have been providing health insurance to their workers, said Edmundson, who is chairman of Affordable Care Today, a group that pushed for universal coverage in the state since 2004.

Thomas P. O'Neill, chairman of the board of trustees for Mt. Auburn Hospital in Cambridge and the son of the late Democratic speaker of the U.S. House of Representatives Tip O'Neill, said Massachusetts, with the legislation, has set the rest of the country on the course for universal health care.

``I think it is revolutionary and I think people are going to pay close attention,'' O'Neill said.

Details

Details still need to be worked out, such as how people who can't afford insurance are going to be handled, said Michael Doonan, a professor at Brandeis University who is also executive director of the Massachusetts Health Policy Forum, a nonpartisan research group.

These details and their implementation are what will really determine whether the proposal will succeed and whether it can be exported to other states, said Geri Denterlein, a trustee on the Massachusetts Taxpayers Foundation, a non-profit business group that studies state government.

The plan is about 120 pages long and no one really knows how it will work in reality, Denterlein said.

``The devil will be in the details,'' said Denterlein, who owns a public affairs consultancy in Boston. ``There is a lot to work out in the implementation.''

Close Contact

When asked about President George W. Bush's thoughts about the bill at today's White House press briefing, spokesman Scott McClellan said the Department of Health and Human Services and Centers for Medicare and Medicaid Services have been in ``close contact'' with Romney as the legislation has been developed, and are looking forward to seeing the details of the bill.

``Part of this includes a component that involves expanding Medicaid coverage to cover some of the children that are currently not getting that insurance coverage,'' McClellan said.

Romney said he expects the federal government to be supportive. The program is a model for other states, he said, because it shows that Democrats and Republicans can come together to solve problems.

Doonan said the bill happened in Massachusetts because a coalition of business, political and social leaders got together and worked out a compromise.

``It is a fairly modest proposal,'' Doonan said. ``It is not a liberal, `Taxachusetts' plan. If expectations are down a little bit and groups form then it can happen in other states.''

To contact the reporters on this story: John Lauerman in Boston at jlauerman@bloomberg.net; Brian K. Sullivan in Boston at Bsullivan10@bloomberg.net.

Last Updated: April 5, 2006 17:31 EDT