Massachusetts Health Plan is No Model for Other States

Massachusetts Gov. Mitt Romney has been hailed for achieving what no other political leader has been able to accomplish: Enacting a broad health reform plan with strong bi-partisan support.


But the details show this is not a Massachusetts miracle, and others should certainly proceed with caution before following the Bay State?s lead.


Massachusetts is seeking to be the first state in the nation to have all of its citizens covered by health insurance. But in trying to achieve that goal, legislators have created a plethora of mandates and enforcement provisions that many Americans would find encroaches on their freedom.


For example, the legislation requires everyone in the state to purchase health insurance or face financial penalties. Political leaders already are finding resistance from citizens even before the mandate takes effect next July.


Another serious concern is the financing. The state says it is just moving money around ? redirecting about $1 billion in federal money and other fees to subsidize health insurance for those under 300% of poverty ? i.e., individuals earning about $29,400 a year.


But there is nothing in the law to keep health insurance costs from soaring. And the legislation does not relax the expensive coverage mandates and regulations that have made insurance in the private marketplace so expensive in the first place.


Actuaries originally estimated that the cost of health insurance in the state would be about $200 a month. But when state regulators set the premium rates last month, the charges will be $276 to $391 a month.


While there are subsidies for lower-income workers, the new mandate means that someone earning $30,000 would have to find an extra $3,000 to $4,000 a year to pay for health insurance ? or face financial penalties at tax time.


The Massachusetts law also contains a backdoor employer mandate. It forces employers with 11 or more employees to pay a fine of $295 for each worker without health insurance and to pay any health costs above $50,000 for their uninsured workers.


Of further concern is the reach of the state in specifying what kind of insurance people are required to buy. The legislation stipulates that the policies available to lower and moderate-income workers must cover all of the state?s 40 mandates, from hair prostheses to in vitro fertilization.


And there are a number of other mandates, reporting requirements, penalties, and enforcement provisions in the new law affecting both individuals and businesses. For example, the law requires every employer and employee in the state to sign “under oath” a Health Insurance Responsibility Disclosure form, testifying to whether the employer has offered insurance and whether the employee has accepted or declined.


State agencies will be checking on individuals’ insurance status, monitoring their income to see if they qualify for subsidies, and tracking individual health habits (like smoking and wellness activities) to determine how much they should pay for their health insurance.


In addition, it creates at least 10 new boards and commissions to create and run the new health system, such as the Health Care Quality and Cost Council, the Payment Policy Advisory Board, and the Health Access Bureau.


Gov. Romney will leave office when his term ends this year, and that will leave much of the implementation of the new plan to the next governor and, of greater concern, to the regulation writers in state offices.


It will take several years to see how the new plan turns out, but this Republican governor in a Blue state may have laid the foundation for what could become a very intrusive, onerous, and expensive health plan for Massachusetts.


Instead of warming up its Xerox machines, other states should wait to see how the plan works before rushing to follow its lead.


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Grace-Marie Turner is president of the Galen Institute, a non-profit research organization in Alexandria, VA, that specialized in free-market ideas for health reform. She can be reached at galen@galen.org or at P.O. Box 19080, Alexandria, VA 22320.

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Massachusetts Gov. Mitt Romney has been hailed for achieving what no other political leader has been able to accomplish: Enacting a broad health reform plan with strong bi-partisan support.


But the details show this is not a Massachusetts miracle, and others should certainly proceed with caution before following the Bay State?s lead.


Massachusetts is seeking to be the first state in the nation to have all of its citizens covered by health insurance. But in trying to achieve that goal, legislators have created a plethora of mandates and enforcement provisions that many Americans would find encroaches on their freedom.


For example, the legislation requires everyone in the state to purchase health insurance or face financial penalties. Political leaders already are finding resistance from citizens even before the mandate takes effect next July.


Another serious concern is the financing. The state says it is just moving money around ? redirecting about $1 billion in federal money and other fees to subsidize health insurance for those under 300% of poverty ? i.e., individuals earning about $29,400 a year.


But there is nothing in the law to keep health insurance costs from soaring. And the legislation does not relax the expensive coverage mandates and regulations that have made insurance in the private marketplace so expensive in the first place.


Actuaries originally estimated that the cost of health insurance in the state would be about $200 a month. But when state regulators set the premium rates last month, the charges will be $276 to $391 a month.


While there are subsidies for lower-income workers, the new mandate means that someone earning $30,000 would have to find an extra $3,000 to $4,000 a year to pay for health insurance ? or face financial penalties at tax time.


The Massachusetts law also contains a backdoor employer mandate. It forces employers with 11 or more employees to pay a fine of $295 for each worker without health insurance and to pay any health costs above $50,000 for their uninsured workers.


Of further concern is the reach of the state in specifying what kind of insurance people are required to buy. The legislation stipulates that the policies available to lower and moderate-income workers must cover all of the state?s 40 mandates, from hair prostheses to in vitro fertilization.


And there are a number of other mandates, reporting requirements, penalties, and enforcement provisions in the new law affecting both individuals and businesses. For example, the law requires every employer and employee in the state to sign “under oath” a Health Insurance Responsibility Disclosure form, testifying to whether the employer has offered insurance and whether the employee has accepted or declined.


State agencies will be checking on individuals’ insurance status, monitoring their income to see if they qualify for subsidies, and tracking individual health habits (like smoking and wellness activities) to determine how much they should pay for their health insurance.


In addition, it creates at least 10 new boards and commissions to create and run the new health system, such as the Health Care Quality and Cost Council, the Payment Policy Advisory Board, and the Health Access Bureau.


Gov. Romney will leave office when his term ends this year, and that will leave much of the implementation of the new plan to the next governor and, of greater concern, to the regulation writers in state offices.


It will take several years to see how the new plan turns out, but this Republican governor in a Blue state may have laid the foundation for what could become a very intrusive, onerous, and expensive health plan for Massachusetts.


Instead of warming up its Xerox machines, other states should wait to see how the plan works before rushing to follow its lead.


#####


Grace-Marie Turner is president of the Galen Institute, a non-profit research organization in Alexandria, VA, that specialized in free-market ideas for health reform. She can be reached at galen@galen.org or at P.O. Box 19080, Alexandria, VA 22320.

SHARE THIS ARTICLE

About the author