A Health Insurance Breakthrough?
Massachusetts is poised to enact the first plan by a state to address the health insurance needs of all its residents. Note I didn't say "provide health insurance to all its residents" because that's not exactly what is happening here. The plan, which has bipartisan support and the support of the state's Republican governor, Mitt Romney, essentially works like this: if you have health insurance, you keep on using that, supposedly at reduced premiums. If you are poor, you get free or very low cost health insurance from the state. Now, here's the kicker: if you are not low income, you face a state mandate to purchase health insurance on your own. If you don't, you will pay a tax of up to $1,000 to the state. Businesses with more than 10 employees who don't insure their workers must pay an annual tax to the state of $295 per employee. It isn't clear on first reading whether individuals who pay the tax or the employees of businesses who pay the tax become enrolled in an insurance plan of some sort.
Gov. Romney, whose father was Governor of Michigan in the 1960s (father and son came to my hometown of Holland, Michigan, one year to march in the Tulip Time Parade), likes this plan because of the "personal responsibility" aspect. That's all well and good. But it appears easy to fall outside the group that qualifies for cut-rate insurance. Household income of more than $48,000 for a family of three will land you in the pay-tax group. Do assets count against you? If you lose your job but aren't poor enough will you still have to pay the tax?
A far better plan would be a Canadian style, single-payer plan. The Massachusetts plan will do little to restrain health care costs. Everyone will still be paying the massive costs of the medical-insurance bureaucracy. Charging businesses only $295 per year per employee is nothing. Health insurance can easily cost $12-14,000 per year per employee. If I'm a sleazeball business owner who cares only about my personal bottom line, let's see, $14,000 vs. $295. I think I'll dump my insurance plan and pay the state tax. This plan is a start, but it won't replace the need for a tax-based, comprehensive plan of the Canadian type.