Potemkin health coverage

[rhu]

So as I understand it, the so-called groundbreaking law passed this week here in Massachusetts is a triumph for insurance companies and politicians. I don't see how it helps the uninsured.

• Employers who don't offer insurance will be fined $300 per employee per year. Since insurance premiums are about ten times that, I don't see how this will incentivize any employer who hasn't already chosen to offer insurance to do so.
• Individuals who choose not to purchase insurance will lose their $150 per person exemption on their state income taxes. Again, if a healthy well-off twenty-something chooses to self-insure rather than pay premiums, this won't change that person's calculations.
• Individuals who can't afford to buy insurance, even once the government certifies one or more insurance plans as "affordable" (which is yet to be defined), are the ones who will be most hurt by losing the $150.

So congratulations to Presidentialcandidate (formerly known as Governor) Romney and the Great and General Court for getting adulatory press for "providing universal coverage" by imposing an unfunded mandate on the individual citizen.

After all, if it's illegal to be uninsured, only criminals will lack health coverage.

Comments

[cjsmith.livejournal.com]

You might also enjoy this rant.

[rubrick.livejournal.com]

You're certainly right about the employer's part of the deal. Apparently the original figure was around $800, reduced to $300 in negotiations (and Romney may line-item veto even that).

However (mostly playing devil's advocate, as I really don't know whether the law is better than nothing), I think there are some points to be made in its defense.

As I understand it, insurance for the poorest is being entirely subsidized by the government, so there is certainly a gain there. And the idea is that by requiring those who can afford it to buy insurance, the pool of insured people grows, thus theoretically leading to lower premiums.

The penalty for an individual who can afford insurance but who uninsured starts at $150, but rises over a few years to 50% of what the cost of premiums would have been. At first blush this still seems too low to provide much of an incentive; but even for healthy, well-off people, there is always the risk of having to make a large medical expenditure, so this certainly does change their calculations; it makes opting out less obviously worth it.

Basically, the idea is to try to get the healthy and wealthy to subsidize the medical care of the sick and poor by forcing them to make a bad bet (insurance). The stupid thing, of course, is that there's a far less convoluted way of accomplishing this; it's called progressive taxation. Unfortunately, conservatives have created a landscape such that few politicians, even in liberal Mass, will even dare to suggest that raising taxes in order to build a better society might be a reasonable choice. So at the moment this sort of end run is probably the best we can hope for.

[violetcheetah.livejournal.com]

I thought from what little I've read that while in theory, insurance for the poorest is being entirely subsidized by the government, the legislature hasn't actually come up with a way to fund it.

[lucretia-borgia.livejournal.com]

And the idea is that by requiring those who can afford it to buy insurance, the pool of insured people grows, thus theoretically leading to lower premiums.

Not to be a total cynic, but the insurance companies will have a great argument for raising the premiums further. You see, NOW they'll have this mess of formerly uninsured poor people -- those most likely to have health problems going into the system, since they had no or poor (preventive and acute) health care before, and still have poor dietary options because they can't afford fresh veggies and good meat and whole grains and whathaveyou, are more likely to have children with health problems, esp. asthma, and are more likely to need emergency care as victims of violence -- who are adding to the insurance companies' costs. The number of healthy individuals who could afford insurance but don't and who would theoretically be added to the rolls is (according to one of the pieces in today's Globe) around 50K. That's not enough to drive costs down by increasing the pool.

[vettecat.livejournal.com]

I've been wondering about that too. I would imagine that the vast majority of people without health insurance don't have it because they can't afford it. (It's a rather large chunk of our budget as it is.) How does this help?