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November 16, 2005

And it's Illinois in the lead ...

With today's news that Illinois has just enacted a program that will make affordable health insurance readily available to every child in the state, the pressure is (or should be) on Massachusetts lawmakers to take similarly bold action.  At present, things are in limbo here - the House passed a Cadillac version of health care; the Senate passed a Buick; and we now must await the work of a conference committee to see what the final version is.

And now for some random musings on the subject of individual mandate.  I still hate it, and so, apparently, do a lot of those young healthy types that the insurers desperately want in the risk pool.  Yet I recognize the unfairness of these folks unexpectedly getting hurt or getting sick, showing up at the emergency room, and expecting to receive care without paying for it.  What to do?

How about this.  Let's pass something like the House bill, except that the individual mandate would work like this: if you show up seeking medical care but don't have insurance, you get two choices: pay the full freight out of your own pocket, or enroll in a health insurance plan and pay an enrollment fee of one year's worth of premiums (almost certainly less than what the hospital bill will be), whereupon the insurer will cover you.  For people eligible for free or subsidized health insurance, it's a no-brainer: those are people who should have been enrolled in MassHealth or a similar program anyway, and the enrollment fee would be modest or nonexistent.  Those who make too much money for subsidized programs, however, will have to pay the full enrollment fee, and will have to stay enrolled for, say, two more years, or they'll have to reimburse the insurer for the hospital costs.  Perhaps this should be coupled with state-funded reinsurance above a certain level to protect insurers from unanticipated catastrophic costs (I think state reinsurance is a good idea in any case).

This is off the top of my head, so maybe there are good reasons that this wouldn't work (it might, for example, be difficult to administer).  But it strikes me as far less objectionable on policy grounds than an individual mandate, while accomplishing at least some of what the mandate seeks to do. [Update: upon further reflection, I'm not sure this idea works at all - see the comments.]

(For the policy wonks out there: yes, I recognize that the point of the individual mandate is to get young healthy people into the pool before they get sick so that they're improving the pool's risk profile, and enrolling those people only when they get sick seems in tension with that goal.  But I think we can ameliorate that problem somewhat by (1) requiring the payment of a year's worth of back premiums, and (2) requiring that enrollment continue for at least two years.  Assuming that a good number of these folks show up with one-time, non-catastrophic conditions (a broken leg, for example), the insurers' outlay wouldn't be that great, and in exchange they'd get a reasonably healthy enrollee paying at least three years of premiums.  Perhaps my assumption is wrong, in which case this wouldn't work.  But we should think about something along these lines as an alternative to the individual mandate.)

Posted by David at 11:14 AM in Health Care, Massachusetts, National | Permalink


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The big administrative nightmare that I can imagine is that the person will move out of state afterwards (before the 2 years are up) and won't continue to pay the premium.

How would you enforce your proposal on non-residents who had been residents?

Posted by: Abby | Nov 16, 2005 3:36:19 PM

Another version of your question would be this: suppose, 6 months later, the person takes a job that offers health insurance as a benefit. Do we continue requiring the person to pay the premium for the individual policy? That seems silly, yet it's unfair to the insurer who footed the bill to allow the person to pull out early and go with another policy. Maybe some sort of early buyout option, which would still be less than the hospital costs? Like I said, I'm making this up as I go along ...

Posted by: David | Nov 16, 2005 4:36:29 PM

It sounds excessively complicated to me. That's why I'd rather see some sort of single-payer, but that's a long way away.

Posted by: Abby | Nov 16, 2005 7:06:17 PM

As I think about it more, I have concluded that my idea doesn't really work. So never mind. It would be great if there were a way to get low-risk people into the risk pool without forcing them in, but I'm not sure what it would be.

Posted by: David | Nov 16, 2005 9:36:38 PM

Abby, you are so right; the current health reform plans with high-profile attention ARE EXCESSIVELY COMPLICATED and that is why clear-headed thinkers do indeed see the benefits and the logic of moving toward a single payer system. (i'm trying to come up with a more descriptive phrase that has not been so maligned, maybe "streamlined financing for affordable universal coverage").

our collective thinking on this issue has been clouded quite intentionally by insurance and drug company execs who hire VERY skilled PR firms and lobbiests to scare both politicians and us regular folk away from believing in the kinds of far-reaching reforms that we so urgently need to begin.

True, we cannot get there in one giant step. but we can put forth a vision of affordable health care for everyone, articulate it to others, and work together to make it our reality.

check out the statewide coalition MassCare.org that supports this vision (Senate Bill 755); it consists of over 90 organizations including Health Care For All, my group-the Alliance to Defend Healthcare/DefendHealth.org, labor unions, senior organizations and so many more.

If we would collectively speak truth to power we could win real universal healthcare reform.

Posted by: Defend Health | Nov 16, 2005 9:56:49 PM

Defen Health,

I just want to be clear that I think that single-payer is a non-starter at the state level, and I'm not going to waste my time on it. That's why I supported the MassACT ballot initiative and have been out collecting signatures.

I don't think that any one state could do it, since Medicaid and Medicare already exist, but I would like to get to Medicare for All eventually.

So I support organizing around taht issue and trying to get Democrats into Congress who will support it as well.

Here's my policy prescription.

1.) Open up FEHB to everyone, but allow Medicare with a proper prescription drug benefit to compete with the private plans.

2.) Disallow the employer's deduction for health benefits and make all employer provided health benefits fully taxable to the employee.

3.) Provide a fully refundable tax credit ( a voucher, if you will) for the cost of an FEHB plan. David, I think that this solves your problems with other proposals. It doesn't require anyone to be insured, but if your Federal tax liability is less than $5,000 (assuming that's the cost of an individual plan under the FEHB), you're getting money that you wouldn't otherwise have. For everyone else you can choose to forgo health insurance, but if you do you'll just have to pay the same amount in taxes, so why would you?

I haven't done the math on this. I think it might require rejiggering some tax rates (not just returning to Clinton taxation levels) although I'd think that for upper-income workers some of the cost of health insurance would pass through to them in the form of higher wages, and you should probably get some more revenue from the corporate income tax.

Posted by: Abby | Nov 17, 2005 10:13:47 AM

I agree that [improved] Medicare for All on the national level is what we need to get to. That's why 30 Mass. groups co-sponsored the 9/1/05 Grassroots Hearing on the Healthcare Crisis which highlighted HR 676 An Act to Establish a National Health Insurance Program, and it's why a number of us are meeting w/Rep. Capuano on 11/23 to have a conversation about why thus far he has refused to sign on to the bill and join Barney Frank, John Tierney, Frank Olver and other MA Reps who have endorsed HR 676.

I beg to differ on an important strategic analysis. I and most other health policy-types, advocates and activists agree that it is on the state level that universal coverage reforms will be achieved and that these successes will lead the way for national-level reform. This is why the national progressive group America's Agenda: Health Care For All (www.americasagenda.org) is working with 4 state universal coverage campaigns, with Mass. being one of the four.

We need to be building the universal coverage movement (targeting political and grassroots constituencies) on many levels simuntaneously--local municipalities, state, and national along the way, but state-based reforms are much more achievable in the short-term, especially if we have more political ledership like that provided by Sec of State Galvin, who correctly criticizes the current reform bills as semming to benefit the state's insurance industry more than its citizens .

lastly, I don't understand why your alternative reform ideas seem so accepting of the private profit-driven insurance model. to me, as a nurse and a health justice activist, this market-driven paradigm only perpetuates treating health insurance and healthcare as a commodity instead of an individual and social good.

Posted by: Ann (at Defend Health) | Nov 17, 2005 2:30:33 PM


Because I think that a lot of people will choose Medicare and find that they prefer it. But a Medicare for all financed through taxation would be fine by me.

Posted by: Abby | Nov 17, 2005 3:56:47 PM

I think medicare is better. Blue Cross of California is a great health insurance provider. Health insurance is a major aspect to many and blue cross can help everyone get covered.

Posted by: Blue Cross of California | Nov 21, 2005 11:35:40 PM

>>For people eligible for free or subsidized health insurance, it's a no-brainer: those are people who should have been enrolled in MassHealth or a similar program anyway, and the enrollment fee would be modest or nonexistent.<<

Why this isn't a no brainer. 1. Hospitals and some neighborhood centers now screen for MassHealth eligibility at entrance. 2. Illegal aliens aren't eligible for Medicaid insurance, so will remain in the free-care pool unless covered by employer or individual mandates. This is never stated for political reasons, but understood by planners, and why they never say they can get the uncompensated care below about five percent. There are sound political and public health reasons for insuring aliens, but given the delicacy of the debate, no one on any side wants to argue them.

Posted by: Moe | Nov 23, 2005 10:19:57 AM

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