Mandatory Health Insurance: the Good, the Bad, and the Ugly

Another retread, this one from April 14, 2006 . . . again, hopefully it’s still relevant.

As you may (or may not) have heard, Governor Mitt Romney (Mass-R) just signed a bill that requires every citizen in the Commonwealth of Massachusetts to have health insurance by July 2007. The thinking is that health insurance should be like automobile insurance; you must purchase car insurance to make use of (drive) your car, so you must purchase health insurance to make use of your . . . wait, that comparison only goes so far. Too bad no one in the State House seems to have thought of that. People who cannot afford automobile insurance have the option of not driving; heck, they may not be able to afford a car, anyway, especially in Massachusetts where cars must be minutely inspected each year and all defects must be corrected before you can get your sticker. Also, in Massachusetts we pay annual car taxes (based on the value of our cars) for the pleasure of bumping through craterous potholes on the main arteries. Well, those do get fixed pretty quickly. My point is that you CAN opt out of having car insurance; you just can’t drive if you don’t have it. Massachusetts cancels your registration and revokes your driver’s license if you do not have adequate (i.e. legal) insurance coverage.

Now I know that something has to be done about health care in this country. And maybe this is the first step toward it, as the proponents argue that it is. I hope so. Certainly, other lawmakers are looking at Massachusetts (some with a raised eyebrow, others a smirk, and maybe some are laughing their asses off, but some are truly interested). This is definitely an experiment, though no one has said so out loud.

There is a great deal of buzz about this, and for good reason. There are many merits to the policy: the Commonwealth offers low cost or free coverage for low income families, money that they say will come from the vast savings that regular health care will generate, due in large part to the anticipated decrease in Emergency Room visits by under- or un-insured citizens; the commonwealth’s citizens who are not currently being adequately treated for relatively minor ailments can now get treated; preventive care will likely make a difference in the cost of long illnesses and early detection and treatment may also alleviate cost to the commonwealth, not to mention make the citizens healthier (which, btw, I didn’t see anyone mention: I saw a lot on this bill and the debate surrounding it, I’ve also read a lot, and I haven’t (yet) heard or read of anyone saying they are doing this for the people).

And all this with no tax increase. Yet. Romney is dallying with the notion (i.e. it’s probably set in stone in his mind and camp) of running for the big office in 2008; what better way to appeal to the blue states than by a) coming from one (even if he’s from Utah) and b) getting a “universal” and “comprehensive” health care bill passed. The taxes will kick in too late for anyone to notice. Not that I’d mind higher taxes for good health care. The current (somewhat flawed, I think) plan is to fine businesses that do not offer health insurance to their employees $300 per employee (I haven’t read the bill, but the news reports don’t suggest that the employers must offer AFFORDABLE health insurance), and the individual “tax” for not having health insurance: any individual not having health insurance will face tax penalties of up to $1,000.00 per year (we pay and file state income taxes in Mass). This figure is equal to about half of the least expensive policy that will qualify as “insured,” so in effect, if someone cannot afford health insurance, they must pay half an annual premium to be uninsured. Might as well just get the insurance, right? Well, sure, but there are all too many people who don’t have the money to do so.

Like all bills designed to provide for low income individuals and families, the definition of “low income” is ridiculously unrealistic. For a single person, the annual income needed to qualify for free health insurance / no premiums or deductibles is $9,600. The figure is $38,500 for families of four. In Massachusetts, where the average home sells for close to a million dollars and apartments well outside of Boston cannot be found for less than $1,000.oo per month (I’m not even going to talk about the cost of housing in and around Boston), this is definitely too low. The main people who will be helped by this are the people who are somehow scraping by on less than 10K per year as they will qualify for the free insurance (as long as they don’t make little enough that they do qualify for Medicaid, let the Feds pick up the tab if possible).

What this means to a great many people in Massachusetts who work part or three quarter time or do contract work (part-time or adjunct teaching, self-employment, etc.) and therefore don’t qualify for company health insurance won’t be able to realistically afford health insurance: many such workers intend their situation to be temporary, and sometimes it works out that way, but not always, not even often. Because they cannot ACTUALLY afford health insurance, they will face pretty hefty tax penalties because the Commonwealth decides that they can afford it but refuse to do so. Massachusetts is suddenly not looking like a good place to live. Currently, there are approximately half a million uninsured citizens in Massachusetts, and although I googled around for a bit, I was unable to determine how many of those people are below (and it’s not just below, it’s 300% below) the national poverty line. I’d guess that it’s not as many as people might think.

In short, anyone who is severely poor but still earning enough to have to file taxes will be covered, everyone who is already covered will be covered, but the group who are making a living, if only paycheck to paycheck, won’t be able to afford either the insurance or the tax penalties and will likely be forced to leave the state. But the impact of the migrating population won’t really be felt until all fifty states hop on board and there is nowhere else to go. And Massachusetts is already undergoing a huge population shift (the media has termed it an “exodus”) as baby boomers retire and leave the commonwealth, as tech industries move out west, and the gen x’ers can’t afford housing in Massachusetts. The people who will be moving to Massachusetts will likely be doing so for free or low cost health insurance. This suggests to me that Massachusetts may well end up with a very small proportion of middle class citizens and an awful lot of haves and have nots.



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Most of the above figures came from: http://abcnews.go.com/Health/wireStory?id=1805776

The ones that didn’t come from there, came from: http://www.boston.com/news/local/articles/2006/04/04/mass_bill_requires_healt

For an interesting distillation of the topic and some really great links: http://www.seniorjournal.com/NEWS/Medicaid/6-04-05-EveryoneInMassachusetts.htm

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