Massachusetts health insurance mandate got people at a price
News reports are hailing word from Massachusetts this week that the Bay State’s comprehensive health reform program is a success. Nearly 350,000 uninsured residents obtained coverage under the program, according to an Urban Study report on the reform’s first year. That means more people are seeing doctors outside of emergency rooms and getting preventative care.
But the reports often overlook the down side.
Massachusetts budgeted $860 million for the program this year. That’s nearly $150 million more than was projected. Next year’s costs are expected to go over $1.1 billion.
Which raises the question of how sustainable the program can be. Good intentions are not enough.
The idea behind the program is that low-income people who work but are not covered by employer-supplied insurance could be insured if everyone was mandated to have insurance. If you could afford the insurance, you had to buy it whether you wanted it or not. The mandate would eliminate free riders, people who skip buying insurance on their own and depend on free care in case of serious illness. Usually they are young and healthy, the kind of people who would lower the overall costs of an insurance pool.
The mandate didn’t sit well with some people. The state’s Revenue Department reported that 86,000 residents paid a tax penalty rather than buy insurance. The Massachusetts income tax form required residents to indicate what kind of health insurance they had. If they didn’t have any and the state judged them capable of buying it, they lost their personal tax exemption. That penalty is $219. Soon it will rise to $912.
Will this work if costs keep rising? Or will the Legislature have a rebellion on its hands?
What’s going on in Massachusetts is important because much of the nation is watching. Other states have attempted to imitate it. And candidates in some states, including Delaware, have modeled their own proposals on the Massachusetts plan.
But unless the Legislature can come up with a realistic way of containing costs, this will be just another experiment.
The News Journal
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