(and now for something completely different)
The Country is watching to see how the new healthcare finance plan works in Massachusetts. The State had only 7%-10% of its population uninsured, unlike the regional average around 15%. (My State, Texas has a 26% uninsured population – half of those families make more than $75,000 a year, so, it seems, have decided not to spend their money on insurance. At up to a $1000 per month per person for individual buyers or small employers, it’s hard to blame them.)
The Massachusetts State insurance plan is to increase participation in insurance coverage by requiring all employers to either provide insurance or pay the State $295 per year, per employee.
Unfortunately, it appears that the program is costing more than expected, according to the Washington Times:
Full coverage is the lynchpin of the plan. Yet it’s hard to see how the state will get even close to 100 percent participation, the whole point of the expensive exercise. On the subsidized plans, families will be expected to spend up to 7.7 percent of their income on health coverage. If eligible residents say “no thanks” to this new monthly bill, people are supposed to pay penalties under the individual mandate. This could lead to the absurd result of confiscating a person’s earned income tax credit — a government handout — because one refused to accept a health care subsidy.
Officials haven’t even started designing the private plans — the plans that non-poor individuals must purchase by July of 2007 or face fines.
The theory is that if more of the low risk young and healthy people buy in, even at a low rate, the extra money added to the pool will cut the costs for everyone else and will save the State money in funding for indigent care and Medicaid. And Massachusetts does have a State Income Tax that can be dinged if penalties are needed. However, the insurance plans aren’t allowed to charge different fees for different risk groups and ages. And there are a lot of other mandated benefits required by law. Also, the cutoff point for subsidies is 300 percent of the Federal poverty level, the plans will cost $300 per individual and $600 for each family. It’s estimated that many of those eligible for subsidies and most likely to use their insurance are already insured at higher rates. (From a subscription only article in the Sept-Oct 2006 Hastings Center Report.)
According to another commentary in Hasting Center Report there are more than the obvious dollar costs (free registration required for this article),
Third, the legislation promises that the Connector will help the uninsured find comprehensive and affordable private health plans, but that’s like promising delicious chocolate chip cookies with no fat, sugar, or calories. While officials have projected that the mandatory policy will cost only $300 per month for an individual plan and $600 for a family, the only way to get private plans that cheap is to strip down the coverage:boost copayments and deductibles and exclude important services from coverage altogether. Such stripped-down coverage may let politicians claim they’ve done something
useful, but it provides neither adequate access to care nor real
financial protection. In the RAND Health Insurance Experiment (the only randomized controlled trial comparing highdeductible plans to comprehensive coverage), high deductibles caused a 17 percent fall in toddler immunizations and swelled the number of children failing to see a doctor in the course of a year from 15 percent to 32 percent among school-aged children and from 5 percent to 18 percent among infants and toddlers.2 While high deductibles reduced children’s use of “rarely effective care” by 33 percent, they also reduced “highly effective care” by 28 percent. Adults in the
RAND Experiment also used less preventive and primary care, and had higher blood pressure and higher risks of dying, when high deductibles were placed on their insurance coverage. Stripped-down plans like those that the Massachusetts uninsured will be forced to buy also do little to protect people against financial catastrophe due to illness. In our own work on medical bankruptcy, 76 percent of those bankrupted by medical problems had insurance at the onset of the illness that bankrupted them; many were ruined by copayments, deductibles, and uncovered expenses such as physical therapy.
Somehow, we’ve got to convince both the insurers and the insured that preventive care will pay off. It’s discouraging to have patients “forget” their wallets so that they can’t pay their co-pays (forcing me to bill them or be liable for Federal insurance fraud felonies), and it’s very discouraging to have them trade “Primary Care Providers” for a $10 increase in co-pays.
That felony risk for failure to charge the patient a co-pay is not the only problem with copays and deductibles for Medicare docs. Medicare patients who have an HMO that I don’t accept or who have a high deductible “Health Savings Account” type of insurance cost docs when we are required to bill Medicare before billing the patient. Not many people realize that the Social Security Act was amended in the late ’90’s to force any doctor who sees Medicare to treat all Medicare-eligible patients the same, no matter the patient’s actual financial status: we must file for the patient, limit our fees to 125% of Medicare, and we must never, ever charge anyone less than Medicare allows. And then, our patient will get a letter telling him that the tetanus shot he received in our office after he stepped on a rusty nail was not “medically necessary.”