Mass Health coverage bill: all about politics Posted by: McQ
on Friday, April 07, 2006
A couple of points about the Mass. law mandating people within the state buy health insurance. Kevin Drum discusses it:
UNIVERSAL HEALTHCARE IN THE BAY STATE....Several emailers want to know what I think of the new Massachusetts universal healthcare legislation. Answer: I'm not sure.
Well I'm not sure either but I am sure of a couple of things:
A) It is not "universal health care". It is, instead, an attempt by the state to legally coerce all of its residents to have health insurance:
The Massachusetts legislature approved a bill Tuesday that would require all residents to purchase health insurance or face legal penalties, which would make this the first state to tackle the problem of incomplete medical coverage by treating patients the same way it does cars.
If freedom equals choice, this bill eliminates choice.
Drum goes on:
At the same time, the plan itself is a fairly unattractive kludge that, in essence, extends Medicaid to more people and levies a small fine (in the form of higher income taxes) on anyone who doesn't have health insurance but could afford to buy it. This doesn't do anything to address cost containment and doesn't do anything to make the system more efficient.
What's more, as several people have pointed out, Massachusetts is in a very unusual position: they have such a small uninsured population that they were able to pass their plan with almost nothing in the way of new taxes to fund it. There are very few states that are in this position, which makes the plan's usefulness as a model limited.
B) It is not a "plan". It's an unfunded mandate coupled with a subsidy for certain sectors of the population. For one part of the citizenry it is :"Do this or suffer these consequences". For the other it is an extention of an already existing program.
The "consequences of not doing it", however, seem to be minimal:
All residents will have to provide details about their health insurance policy on their state income tax returns in 2008. Those who do not have insurance would first lose their personal state tax exemption, perhaps worth $150, and later face penalties equal to half the cost of the cheapest policy they should have bought. That might work out to $1,200 per year, officials said. Those who cannot find an affordable plan could obtain a waiver.
A 22 year-old weighs the cost of the penalty with the cost of a policy and opts for the penalty. It costs less. An economically sound judgement.
Then there is this part of the bill:
Another aspect that may change is the $295 annual fee that the bill would require companies to pay for each employee they do not provide with insurance. Legislative leaders have insisted that this money be fed into the pool that would subsidize low-cost policies for the uninsured, but Romney said that would be unnecessary.
The only appealing aspect of the bill would be the removal of health care insurance provision from employers. As I've always said, it has no business there. It should be purchased individually outside of where we work just as all our other insurance is purchased. That would end the problems of portability and pre-existing conditions.
But this bill isn't the way to do it.
Where Drum gets close to understanding what this is all about is here:
On the other hand, I think Jon Cohn has an incisive take on the political ramifications:
Nationally the most important impact of this new law may be on politics, not policy. Once [governor Mitt] Romney starts boasting about how he achieved universal health coverage in Massachusetts, it will become that much harder for conservatives to demonize the very concept as "big government." Oh, they'll try — and they'll have at least some success. But now Democrats will have this retort: If a Republican governor and leading presidential contender with strong conservative credentials thinks universal health care is a good idea, how radical an idea can it be?
That's right. If Romney runs, he's going to make universal healthcare a major plank in a Republican campaign. Even if he loses, that's a huge step.
Only if this is examined casually as it appears Drum has done. This is no "huge step" by any stretch. What it is is the usual freedom limiting mandate in sheeps clothing. And it has government dictating and coercing instead of enabling.
But it's good "politics", which, after all, seems to be the most imporant aspect of much of what we see being done legislatively today.
See the pending immigration legislation for more examples of politics over substance.
The Mass. "universal healthcare" bill certainly isn’t the "universal healthcare" that the likes of GM, Ford and United Airlines have been hoping for.
Instead of the state taking on the responsibility for healthcare (in this case the ER costs of the uninsured were costing the state plenty), the state has now attempted to dump the costs of the uninsured on private sector employers by statutory mandate.
If one puts aside the improper labeling for a moment, this is an "universal healthcare" program that meets most of the "free market" tests. This plan certainly seems better than give the efficiency of the Pentagon and the sympathy of the IRS, but there is no Nirvana here.
The only appealing aspect of the bill would be the removal of health care insurance provision from employers. As I’ve always said, it has no business there. It should be purchased individually outside of where we work just as all our other insurance is purchased. That would end the problems of portability and pre-existing conditions.
I understand how removing the link between employment and health-insurance would end problems such as portability. I’m at a loss to understand how the problem of ’pre-existing conditions’ is solved by individually purchased health insurance.
I have my own independently purchase health insurance, and I still had to provide information pertaining to my medical history before the company would choose whether to insure me or not. If I had any serious or outstanding health problems, I would have likely been denied coverage. If anything, employer provided coverage seems to be more tolerant towards pre-existing conditions, but not always.
Look! A Massachusetts Mirage.....uh, sorry, I meant to say Miracle.
The law of unintended consequences won’t kick in for a while. When it does let’s see if the rest of the country hears the truth about it. And if you look at where some of their funding is coming from, well, that would be from the Fed Gov. I’d like to know how much of it went the circle from Massachusetts tax-payers, to the Fed Gov, and back to Mass-waaaa-chusetts, and how much went from the rest of us, to the Fed, and into Mass-waaaa-chusetts.
As with any program, "The Devil is in the details..." What are the details of the program? The Cato Institute lays out some "problems" with any such program and, considering that they are going to be a priori opposed to any such program, they ask some pertient questions, about enforcement and vouchers and reimbursement. So exactly HOW does the MA Program work, I understand it MANDATES Health Care Insurance for everyone, but exactly how is it enforced and how are the poor going to receive their subsidies and how much of a tax burden will that be? Bt as the Cato monograph pointed each HOW the program addresses these issues will affect the cost and success of the program....
"A 22 year-old weighs the cost of the penalty with the cost of a policy and opts for the penalty. It costs less. An economically sound judgement."
Well, I don’t think this is necessarily right. Presumably, the economically rational 22-year old only opts for the penalty IF the amount that the 22-year old is willing to spend on a health insurance policy (absent the penalty) is less than the difference between the cost of the policy and the penalty amount. That is, if the cost of the policy is $2400/yr, and the penalty is $1200/yr, then the 22 year old will buy the policy if he would be willing to spend between $1200 and $2400 on a policy (absent the penalty) but not if he would be willing to spend less than $1200 on a policy (absent the penalty). In other words, if the 22-year old were willling to spend $1800 for a health insurance policy (absent the penalty) (i.e., the policy is worth $1800 to him), then he’d rather spend $2400 for the policy than pay a $1200 penalty and get nothing.
Well, I don’t think this is necessarily right. Presumably, the economically rational 22-year old only opts for the penalty IF the amount that the 22-year old is willing to spend on a health insurance policy (absent the penalty) is less than the difference between the cost of the policy and the penalty amount.
Obviously. The point is, the concept of "universal" coverage goes out the window with his decision.
If one puts aside the improper labeling for a moment, this is an "universal healthcare" program that meets most of the "free market" tests.
How does being penalized on your taxes make this a ’free market’ for individuals who don’t have coverage through work? Where’s the ’free’ part? What, they’re free to pay the penalty?
if the 22-year old were willling to spend $1800 for a health insurance policy (absent the penalty) (i.e., the policy is worth $1800 to him), then he’d rather spend $2400 for the policy than pay a $1200 penalty and get nothing.
This presumes he HAS the $1800 difference between the $2400 policy and the $1200 penalty. It could just as easily be he doesn’t have, or doesn’t want to spend that extra $1800. He may view spending the $1200 AND GETTING NOTHING as a better deal only because he’ll end up screwed for not paying his taxes. It’s exactly the same as getting a ticket for living in Massachusetts without health insurance.
I would think that the State should be REQUIRED to give him something for his $1200! They aren’t providing any service, only punitive damage. For his taxes they can argue he gets roads, police protection, etc. Not so for that $1200.
So now the tax is a means of gaining revenue, subsidizing those too poor to get their own (which is probably the category an uninsured 22 year old is going to fall into by the way), and punishing people rich enough, by the state’s definition, to buy insurance, and who currently don’t.
The magic there is ’the state’s definition’ of what makes you wealthy enough. Do you suppose there’s a lot of wealthy idiots in Massachusetts who don’t have health insurance? Wait until discretionary spending drops off. Gas at $3.00 a gallon, a state income tax, a sales tax, and mandatory health insurance, or fines. Hail the People’s Republic of Massachusetts! CommonWealth indeed.
I won’t even begin to ask what happens to the illegal immigrants in Massachusetts who aren’t paying taxes AND don’t have medical insurance. The hospital will do WHAT to them when they show up in the emergency room? Give them medical treatment and report them to the taxing authority? Not bloody likely.
I have heard that there is a new regulation that insurers within Massachusetts must now allow children through the age of 22 who are not students to remain on their parents’ health insurance. Is this true? Is it part of this bill? This would alleviate much of the costs to all of those 19-22 year-olds who are not students, as it would be cheaper to be covered through their parents’ policy for a few extra years. Does anyone have any info regarding this?