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POLICY: Massachusetts Set to Offer Universal Health Insurance

Today’s hot news is that Massachusetts is set to move to Universal Health Insurance via a universal individual mandate and subsidies for the poor. This is a good start.

Then when everyone’s paying into the system the next step is to mandate community rating and get a proper set of cross-subsidies in place. Finally, once the plans have got everyone in the system, and can’t play them off against each other, they’ll have to turn to seeing what they can do about the provider costs.

If the national system did it that way, it wouldn’t be so bad. After all, it worked in Japan and Germany.

Of course like most politicians Romney doesn’t quite understand what’s coming next.

Governor Romney, who is considering running for president in 2008, said in an interview today that the bill, passed by a legislature that is 85 percent Democratic, was "95 percent of what I proposed." He said, "This is really a landmark for our state because this proves at this stage that we can get health insurance for all our citizens without raising taxes and without a government takeover. The old single-payer canard is gone."

Either the insurers will not be regulated, and the market will implode with under-insured replacing the uninsured, and consumers and providers will be equally grumpy as it’ll all have been a head-fake. Or the insurers will be properly regulated in time, and the approach I suggest will be inevitable. And frankly that’s close enough to single payer for me to be happy so long as Mitt is….

Do any of my Mass readers have a comment or two?

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33 replies »

  1. I grew up in Ottawa (Ontario) and now live in Calgary (Alberta) – and I’m 52 years old. I’m pretty healthy, but I’ve had accidents in my life and a few illnesses. The care i”ve had was not only excellent (including ECG scans, Xray’s, blood tests, etc), and the diagnostic skills were also leading edge), but this was also supported by a lot of human care. The doctors, nurses and other health care people that cared for me never seemed grudging about taking care of me – they were also under the same plan as I was – maybe it was because they knew that their own families would also come under that care, and that gave them a sense of the “over all”. The money for doctors may not be as big as it is in America, but tuition going in is about one-tenth (if you talking in terms of private school fees and comparing to our “ivy league” schools), and malpractice insurance is much, much less – I don’t know. I could go on, but I think in the end it boils downs down to spreading out a measure of care for your community – the boundaries of that community are always up to you.

  2. No, for the government to provide healthvare would be an aweful idea. People dont realize that if that is the plan then we would have to pay for it anyway through taxes. And if that wasn’t so then they would cut funding in other important areas like welfare or school funding. Also for the government to provide healthcare nothing would be done well. Think about how many government services that the government has right now that dont run nearly as smoothly as we had ever hoped. Such as the U.S. income tax system when they first provided It collected just one percent from the highest income citizens. A few years back the government made a tax siplification guide which was over 1000 pages long. Every trip to the doctors office would become a political battle the government would not look into every case wich they shpud although its nearly impossible to do so. For example if someone wanted a breast reduction surgery for the reason of looks, the person who needs the same surgery for back prblems would be denied. What about a hysterectomy for fibroid problems? What about a nose job to fix a septum problem caused in an accident? All would be denied for the reason of it being an “Elective Surgery” People wont decide not to go to the doctor for little things such a a cold or a sprained finger. They will figure, “Hey I’m already paying for it why not.” Doctors would have to spend time on more patients with minor problems and people with critical problems would have to wait. Doctors will have poor flexibility and patients will recieve poor care. Also wages would probobally be lowered and may prevnt those who would evntually become a doctor. Noone is going to go to school for 8 years and want to reciev mediocre pay. Healthy people who hardly ever have to go into the docor will have to pay for people who abuse their bodies. Smokers, overeaters,people who dont excercise, and even drug users will be people who you will potentially be supporting. The entire health care industry would be worthless countless people would be tossed aside. There would be a long and arduous task of patient record creation and new database construction wich would aslo cost large sums of time and money.

  3. Cheryl’s Office…If you are in Massachusetts I would be able to help you with cost containment health coverage for your employees. email: SecondBomb@aol.com if you want to discuss.

  4. After many years of managing large organizations in the corporate world I started my own small business five years ago. I have struggled to offer a solid health care plan for my employees. We have had steady growth over the years, but not the cost of health care has grown even faster. Do you know of any states that offer a subsidized small business health care plan like Arkansas?

  5. I am 37 years old and make 10.40 an hour. I cannot afford health insurance and won’t be getting it. Romney’s stupid law is going to make me even more poor next year. I hope he is happy.
    I have not been to a doctor since I was 16 and even when I needed one I just didn’t go.

  6. I agree with sickofsicko. There are flaws in every system, and there isn’t a perfect answer for any problem. Sure, universal coverage would look great on paper, but would it actually be executed like it is on paper? Communism was a great idea on paper, but human nature took over in the long run, and corruption happened. I’m not saying that universal health care would be corrupt, but wouldn’t it end motivation to do research for future medical treatments? If a doctor isn’t be paid as much, won’t they stop working? Doesn’t that explain the long lines in Canada? A lack of doctors?

  7. I don’t think healthy people should be forced to pay for sick people’s medication. If Ron Paul is elected, everyone will have more money to pay their medical bills and donate to charitable organizations to help the underpriveleged. Restore the Constitution! Vote Ron Paul in the primaries! http://www.RonPaul2008.com

  8. I believe that the US health care system and countries with universal health care both definetely have their flaws. No system is ever perfect. I think one of our biggest issues in the US system is the outrageously high cost for medical care. However, I feel one of the biggest flaws of the universal health care system are the ridiculous waiting list. If Canada’s system is so perfect and efficient, then why are so many Canadians trying to obtain private health insurance and coming to the US to have life saving surgeries performed? I really don’t think the American people should give even more power into the hands of the government, especially when it comes to our health. I suggest people on here read this article written by the presidential candidate Ron Paul, who was a medical doctor for 40 years, that proposes some ideas on how we could improve our current US system without opting to jump on the universal health care bandwagon.
    http://www.lewrockwell.com/paul/paul339.html
    I also suggest checking out this short film about people from Canada that have to wait and wait to receive care and sometimes die waiting. I wonder why Michael Moore didn’t interview any of these people in his film…
    http://onthefencefilms.com/video/deadmeat/deadmeat.html
    You also might like to see what kind of health care the average Cuban really gets at this site:
    http://www.therealcuba.com/Page10.htm

  9. Democracy for America is spearheading a Health Care for America Campaign.
    Congressman from coast to coast will be getting knocks on their doors from various groups and people, who we’re backing, and they’ll be forced to hear us out.
    To find out what we’re up to, visit: democracyforamerica.com/healthcare

  10. If Universal Health Care is ever passed everyone will have health coverage but there will be no more doctors to take care of them. If you don’t believe me do your own survey. Call the doctors in your area and ask if they accept medicaid. You will soon discover that very few doctors accept the government sponsored health plans. Why is this? Because doctors that see patients with the government sponsored plans lose money. It cost the practice money to see madicaid patients. Do you really think any type of Universal Health Care will be any better? No way! If Universal Health care is ever passed it will force doctors to open a cash only practice and only the wealthy will be able to afford to see a doctor.

  11. America needs universal health care coverage. No argument there. The big question is who should pay for it? BusinessWeek recently published the top 50 performing stocks in the U.S. and 4 out of the 50 were managed care companies (e.g., United HealthCare)! Between the 4 companies, they posted net revenues of $15B. Can we all imagine how the rest of the managed care companies are profiting? Any one can figure how to profit off the insurance scheme: Massive premiums in, minimum payments out. No wonder hospitals are in such sad financial shape. I say let the fed gov’t mandate that these insurance companies fund a pool to pay for universal health care coverage and stop sticking taxpayers with another bill they cannot afford!

  12. Regarding Universal Coverage and the UK NHS
    Prime Minister Margaret Thatcher and Tim Russert of Meet the Press convinced me that the UK National Health System was a good alternative to the U.S. system. In answer to a question by Mr. Russert Ms. Thatcher noted that UK health insurance costs were very low compared to other European countries and that the low cost was a competition advantage to the UK. The UK NHS system is different, however, from the US. Social Security system – as the following chart shows:
    United Kingdom NHS US social security
    Staff Model HMO PPO
    Defined contribution with global budget Defined benefit
    Single Provider Single Payer
    A good source on the UK system is Aaron’s book – “Can we say no””. Amazon also lists some other books on the UK system which are helpful reading.
    The UK system has three methods of saying “no” to high costs. The Primary Care Physician can say no, the global budgets can say “no” and if those don’t work the UK system has control over payments to providers including hospitals employees, specialists and primary care physicians.
    The UK system has certain disadvantages which are alleviated by some private insurance which allows individuals to avoid long queues.
    Tom Kabele

  13. “The Mass. premiums are about 2-10 times as high as premiums from capitalist states like CA and CT.” That’s flat out BS, and I challenge you to prove it. The only purpose for saying something like that is to serve as a scare tactic…like the Harry and Louise ads of the early 90’s.As far as repealing guaranteed issue and community rating, that won’t work either. Universal healthcare paid thru everybody’s taxes is THE only solution to the escalating medical crisis which binds employees to their jobs, causes workers to seek large employers, etc.To be honest, I don’t feel that health insurance shoud even COME FROM EMPLOYERS. Everybody should be responsible for their own health insurance, paid for thru their income taxes, and which should be mandated for EVERYBODY…no opting out. Do you even know the history of how health insurance became the provision of employers?…dates back to WWII and was supposed to be a temporary thing at that.As for state high-risk pools, most states are financially strapped as it is. Not only are many placed on multi-year waiting lists, but those who are fortunate enough to be accepted are forced to pay exhorbitant premiums due to their health conditions…$400, 600, $800/month etc.Trust me, I’ve done the research. And to add to the misery, if somebody in the high risk pool then accepts a job that pays their health insurance, they’re NEVER allowed to reapply for the high risk pool again should they lose their job, be fired, change jobs, etc. That’s right, it’s a one shot deal…keep it forever (with the escalating premiums) or lose it forever.Universal Health Care is THE only solution, but it’s a HUGE threat to the insurance industry and its gargantuan profits and administrative salaries (especially actuaries). That’s why they try to scare people so badly. Read the studies and be enlightened.

  14. As an actuary with 35 years of experience I have concerns about the unfairness of guaranteed issue (“uni health”) and community rating (“uni age” and “uni sex”) — which I think are continued under the Massachusetts revisions.
    Basically self employed person A owes NOTHING to self employed person B or small business person C — that is nothing more than anyone else in Massachusetts owes to B and C.
    It is unfair to ask small business and self employed persons to pay for all the sick people including:
    (1) those who are too sick to continue to work for larger employers, (2) those who are too sick to work in any job, and (3) those who are sick and move into Massachusetts.
    The Mass. premiums are about 2-10 times as high as premiums in capitalist states like CA and CT. In Mass. the young healthy were asked to subsidize those with bad health habits and the old and sick. It is doubtful to me that the Mass 2006 changes will do anything.
    An improvement over the 2006 Mass. law would be (1) repeal guaranteed issue and community rating (2) have a state high risk pool subsidized by tax revenue for those who were turned down or offered a very high price by the general market.

  15. “Socialized medicine? Yeah, I think it’s a good thing, but then again, I don’t feel that health care should be a privilege, but a right. Single payer/universal health care will definitely be the only solution to the medical crises of escalating cost and providing health care to the uninsured. It’s just a matter of how bad things have to get before the majority of us realizes it.”
    Every time I hear or read this, it reminds me of the joke: If you think healthcare is expensive now, wait until you see how much it costs (in taxes) when it’s free!

  16. And if health insurance was mandated on small businesses, then small businesses would be up in arms.Why should health insurance be connected to business at all? Could it be due to the fact that it gives businesses “contro” of employees? If health insurance were payed thru state and federal taxes on personal and corporate income,businesses would save the costs of plan adminisration. The real fear is that talk of increasing coverage might cut into the coffers of the big insurance companies. Socialized medicine? Yeah, I think it’s a good thing, but then again, I don’t feel that health care should be a privilege, but a right. Single payer/universal health care will definitely be the only solution to the medical crises of escalating cost and providing health care to the uninsured. It’s just a matter of how bad things have to get before the majority of us realizes it.

  17. And if health insurance was mandated on small businesses, then small businesses would be up in arms.
    Why should health insurance be connected to business at all? Could it be due to the fact that it gives businesses “contro” of employees?
    If health insurance were payed thru state and federal taxes on personal and corporate income,
    businesses would save the costs of plan adminisration. The real fear is that talk of increasing coverage might cut into the coffers of the big insurance companies. Socialized medicine? Yeah, I think it’s a good thing, but then again, I don’t feel that health care should be a privilege, but a right. Single payer/universal health care will definitely be the only solution to the medical crises of escalating cost and providing health care to the uninsured. It’s just a matter of how bad things have to get before the majority of us realizes it.

  18. This is nothing but socialism. I see this as a way to make government bigger. It isgoing to create another state agency to snoop on peoples finances to determine how they are going to pay for their helath insurance.
    The govenor says we require you to insure your car, we can force you to pay for your health insurance. What the government doesn’t get is the operation of a motor vehicle is a privelge and the life I lead is a god given right.
    While the outlaws on BeaconHill have passed this law I predict that it will be struckdown as unconstitutional.
    This type of government control over its population is unprecedented. The government can regulate business because it is a privelege to operate a business. The law should have been a mandate on business to include as compensation in addition to an hourly wage, a health insurance policy.

  19. > The answer to cost control for this one is simple:
    > price & quality transparency.
    Price and quality transparency that is simple will be useless. Or worse. Medical Services ain’t haircuts.
    t

  20. I don’t think it will work either for all of the reasons discussed by other commenters. However, I am glad that they are doing it. Arguments between liberals and conservatives on issues like health care can become quite strident with each side insisting that its vision is the best (however defined) way to go. Only real world experience can deliver a definitive verdict as to what works and what doesn’t.
    I think it is unfortunate that, as I understand it, the bill will not allow high deductible plans and also will not provide reinsurance for catastrophic cases above a certain limit, both of which would enable insurers to offer policies at a lower premium.

  21. Joe,
    The answer to cost control for this one is simple: price & quality transparency.
    There can be no better contol on supply than with individuals having a stake in their own health finance decisions. Rather than public or private insurers rationing for a statistical average Joe, to the ire of everybody.
    Markets do not always fail.

  22. The big problem w this initiative is that it is not sustainable over the long term. There are no constraints on supply of health care services, no controls over price or utilization or fees or volume of care.
    And private industry has not shown it can deliver effective cost control, so relying on the free market is quite the gamble.
    My sense is this sounds great, I’m all for the coverage, but without controls on ultimate costs, we have set ourselves up for yet another failure.
    Government did not go far enough.

  23. One question I have is how things are going to work for people who are eligible for Medicaid one month and then not the next. The way it is now, people often bounce back and forth from being covered by Medicaid to being uninsured as their income fluctuates. Are they going to be required to get on a private insurance one month and then go back to Medicaid the next month when their income dips?

  24. Dont Tennesee and Maine already have universal health care? I dont understand all this buzz about Massachusetts when these other states have had their programs running for awhile now

  25. No cherry picking, since all health insurers in Massachusetts are bound to offer insurance on the basis of community rating.
    Matthew, it’s awesome that you were on OPen Source. I recommended you to them a while ago.

  26. I’m a doc and former health plan guy in Massachusetts. Here’s my two cents. This new bill accomplishes 4 things. First, it has a (mild) employer mandate. This is not novel, as Hawaii has it and several other states (including Massachusetts) have had it in the past and later repealed it. Not sure how effective this will be.
    Second, it has a moderate individual mandate, often likened to compulsory auto insurance. However, the penalties seem small enough that those really on the edge will continue to chance it and avoid routine care, figuring that if they get really sick, they can still jump into the free care pool for much less than that benefit is worth. Not sure how effective this will be.
    Third, Medicaid is expanded, covering additional Mass residents, using added federal dollars. This will work as long as the feds approve, which is expected.
    Fourth, it calls for enhanced provider accountability, in the form of P4P in Medicaid and expansion of the public reporting of provider performance that has recently begun here. This may be the most important and long-lasting outcome.
    As noted above, winners will be newly-Medicaid-eligible, employees newly offered benefits, insurers and hospitals. (See the Boston Globe http://www.boston.com/business/healthcare/articles/2006/03/10/bluto_does_good/for who lobbied Speaker DiMasi to clinch the deal.)
    All in all, this is symbolically great, and it will add to the momentum on quality measurement. My guess is that it will be a bit better for access and probably will increase total costs.

  27. I’m inclined to agree with Elliot. The problem is all of this piecemeal crap, and it seems like this plan leaves that entrenched just as firmly. They’re putting more people in Medicaid, putting more people into commercial plans, etc., but it still leaves us with a fragmented system which, like Dr. Hinson said, will do nothing to improve the underlying problems with the system. There should be some efficiency gained from the elimination of the uninsured, but it doesn’t seem like the system as a whole will be dramatically improved.
    On the bright side it’s a new data point for all of us policy freaks!

  28. Rereading my comment above makes me appear negative about this. I’m all for this bill as a package (less in favor of the penalties on individuals, but overall a good thing) , but I’m really cynical about the idea that it is universal healthcare or even a significant step towards it; maybe a tiny baby step.

  29. I see almost no political will here to make it work. I see headline grabbing spin and free lunch economics. It seems the primary motivator in this process is federal dollars and not social consciousness. This plan is based on economic incentives and those incentives are not enough to move the ball significantly towards universal insurance ($295 annually per employee and loss of personal tax exemption – about $1000 are not going to cut it in my opinion). The move to social insurance (community rating and provider cost control) is where the pain and hard work begins and I don’t see that this bill gets you close enough to brdige the gap. As a benchmark, look how little the public has responded to gas prices doubling since 2003. That increase in gas prices is an economic hit greater, on average, than the dollar incentives/disincentives in this bill and I don’t see anything like the kind of behaviorial changes in our driving habits that would be analagous to embracing universal healthcare.

  30. eliott–the equation is right. I assume that there is some political will to see that that outcomes is different as there’s a schism between providers and plans who could benefit from community rating versus shysters who cherrry pick. If they ban the cherry pickers and cross-subsidize the people buying insurance, this has a chance of working.

  31. Look at the stakeholders:
    1. Employed w/insurance see no change.
    2. Employed w/out insurance (who can afford it) may choose to obtain insurance or suffer the loss of the personal exemption on their state income tax. This group is really small and does not really impact the debate.
    3. People who can’t afford individual insurance. They may decide the subsidy is not big enough and still not get insurance. If they don’t get insurance then they owe more state income tax. If they do obtain insurance then that’s more out-of-pocket dollars for them. Looks like a tax increase to me.
    4. Employers who can afford insurance, but don’t supply it. Additional cost for them. Looks like a tax increase to me.
    5. Insurance companies are not going to change their underwriting rules so they write more policies at the same profit margins (or better). To the extent that dissatisfaction leaves them in a poorer regulatory environment in the future, it may be a negative, but it looks like a short-term positive for them.
    6. Massachusetts government ends up with likely a balanced budget or relatively low costs. If it fails to deliver, the biggest impact is on the individuals who still can’t obtain reasonably priced insurance.
    This is really a small, incremental step with huge political benefit in how it’s being played in the press. I concur that the effect depends entirely on Massachusetts willingness to follow-up with insurance regulation and provider cost regulation. Hmm… Doctors, hospitals, and insurance companies vs. individuals who can’t afford policies. I think the winner of that fight is easy to predict.

  32. As a physician in Massachusetts, I should be happy about this. As a small business owner, I should be upset about this. But in actuality, I am indifferent. I sees the good and the bad.
    Massachusetts already has fairly consumer-friendly insurance laws (no pre-existing conditions, wide coverage mandated) and the result is we pay a much higher rate for health insurance. And there are few companies available that will write policies in our state as it is. As an individual where I live, I cannot buy a policy that will allow me to have a HSA, for example. There are only two carriers available to me, and neither offer a high-deductible policy that will qualify.
    The intent of our legislature is well-received. I look forward to the day that no one here is lacking in health insurance.
    But in my opinion, it is bittersweet because it does nothing to bring under control the outrageous administrative burden that health insurance companies cause our health system (and us physicians in particular). There are two groups of people celebrating today in Massachusetts. The poor, uninsured, and the extremely wealthy health insurance company executives and stockholders!

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