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November 14, 2007

Is The Massachusetts Plan Failing?

I don't think we're yet at a told-you-so moment with the Massachusetts health care plan.  So far as I can tell, with seven weeks left, 20 percent of the state's uninsured population hasn't signed up for insurance.   Given that people are lazy, and tend to wait till deadlines to do things, that's not exactly a shocker.  You should see how I handle bills.  Moreover, the question with the individual mandate plans is not whether people sign up in advance, but whether they sign up after the plans kick in.  Put differently, what an individual mandate does is levy a financial penalty on those who don't sign up for insurance.  They do that because we expect people to not sign up for insurance.  So the question is whether that penalty works -- whether it can be enforced, be politically sustained, and then function as a spur to push people into the coverage pool.  If that doesn't work, then the Massachusetts plan won't work either.  But we're not there yet, nor anywhere near it. 

November 14, 2007 in State Health Care | Permalink

Comments

Really, though--isn't the more important question "Is our Massachusetts Plans learning?"

Posted by: Pete | Nov 14, 2007 8:59:05 AM

Put differently, what an individual mandate does is levy a financial penalty on those who don't sign up for insurance. They do that because we expect people to not sign up for insurance. So the question is whether that penalty works -- whether it can be enforced, be politically sustained, and then function as a spur to push people into the coverage pool. If that doesn't work, than the Massachusetts plan won't work either. But we're not they're yet, nor anywhere near it.

Exactly right. The penalties are enforced via loss of tax deductions. We'll need at least two tax periods to pass before we can really gauge success.

CATO is being completely ridiculous on this. No reasonable health policy person expected Massachusetts' plan to be in a different state than it currently is. CATO is looking for failure, rather than an honest assessment.

Posted by: wisewon | Nov 14, 2007 9:07:04 AM

So far as I can tell, with seven weeks left, 20 percent of the state's uninsured population hasn't signed up for insurance.

So, an 80% sign up rate is failure? Cato is ridiculous.

Anyway, I'm one of the lazy, irresponsible, younger, healthy (self-employed) Bay State residents who procrastinated. I finally sent my paperwork in -- got it postmarked on 11/13. The deadline is 11/15, and I guarantee you figures over the next few weeks will show thousands of people signed up at the last minute -- boosting that 80% figure. Still, the penalty -- if you choose to remain irresponsible and pay it it rather than buy insurance -- is only $200. In other words, the legislation quite explicitly went easy on people the first year, and no doubt a non-trivial number of Bay Staters will do the mental arithmetic and decide a $200 tax penalty works better than, say, a $3,000 policy. You could say the legislation is designed not to be overly draconian the first year, and a less than perfect participation rate is anticipated. The penalties, however, increase in subsequent years, as will the percentage of people in Massachusetts covered by health insurance. Hopefully this discussion will all be moot a couple of years down the road, when the whole country gets UHC out of Washington.

Posted by: Jasper | Nov 14, 2007 9:24:05 AM

Government in the USA already spends more on healthcare per capita than the Government of France spends and the French government covers everyone, so we should demand that the US Government cover everyone for what they spend now, and not raise taxes! (see www.overtreated.com and http://www.econtalk.org/archives/2007/05/hanson_on_healt.html)

Medicine is very highly regulated in the USA with government paying half of the money for it already. So how is it not the fault of our corrupt blood-sucking politicians that medical care is so expensive and ineffective! LBJ was such a slime to get the old vote he lavishly covered the old where the bang for the buck of medical care is the lowest and not the infants where the bang for the buck of medical care is highest. Our politicians are soooo corrupt! If infants voted in the number that old people do they would have gotten the lash coverage! But you say LBJ was for the poor, no LBJ was for getting votes!

Medical care is now 17% of the economy and growing at some point medical worker make up enough of electorate that reform through politics becomes impossible. Thus Hillary’s absurd plan that fills their mouths with gold.

Posted by: Floccina | Nov 14, 2007 9:50:03 AM

Floccina, saying that health care for the old gives us poor "bang for the buck" is a specious argument.

While I agree that it's important for the youngest to have health care (we all should have it), humans are designed to break when we get older. Having had my own, I can tell you that kids are much healthier than the oldest among us. Despite the fact that we worry so much about them, children are amazingly sturdy creatures. My 83 year old mother-in-law, not so much.

Posted by: Pope Ratzo | Nov 14, 2007 10:11:31 AM

I'd feel better about the Mass plans if I didn't get the sense that the whole thing has almost no urgency; I finally got a notice this past week (I have insurance, so it's not a big deal) that I needed to have something, but it was a postcard, it was vague, and it gave almost no clear direction on how to go about getting insurance. The whole thing is so under the radar, and wading through glue Yes, last minute enrollments will make a difference, but I'd agree that a lot of folks will look at the choice and skip the insurance. And the test, really, isn't so much whether people get insuirance, but whether they get care. I think the mandate test in Mass will be interesting to see whether it works; but I suspect it's gfoing to tell us blessed little, for quite a while, on whether health care improves for the general popuulace, if at all.

Posted by: weboy | Nov 14, 2007 10:49:28 AM

While I agree that it's important for the youngest to have health care (we all should have it), humans are designed to break when we get older. Having had my own, I can tell you that kids are much healthier than the oldest among us. Despite the fact that we worry so much about them, children are amazingly sturdy creatures. My 83 year old mother-in-law, not so much.

It is a question of priorities. The most bang for the buck stuff should be done first. It may sound harsh but they will not live forever anyway. An awful lot of money is thrown away on medical care for the elderly in the USA with very little (like adding a few days low quality days to life) or no benefit that would not be in France or Italy.

Spending unlimited money of healthcare many not even produce the best results in health because health is correlated with poverty. Correlation is not causation but one can see how newer safer cars and better safety gear for fishermen (the most dangerous job in the USA) could save lives. If you are going to do government-funded healthcare you are going to have make some hard and sometimes gruesome decisions. IMO it seems that the worst thing to do is provide expensive for old people and not for infants. Old people who I have talked with often do not want to live much longer. Also middleclass and rich old people have had plenty of time to save for the inevitable if they want to spend more on healthcare they can save up and spend it (see Appolo Healthcare).

Posted by: Floccina | Nov 14, 2007 10:50:53 AM

Why would I sign up for insurance for $12,000 a year if I'm health? I'd rather pay the $200 and take my chances. If I was old and sick, I'd buy the insurance. The plan aint dead, but it will die.

Posted by: Rick | Nov 14, 2007 10:52:39 AM

In England, when get sick, you can go to an NHS clinic (National Health Service), as long as you can prove you're an English citizen or legal resident or whatever.

Ditto for most other European countries -- indeed for most civilized countries.

There's no "deadline" or "mandate" to prove that you're a citizen. You're obviously a citizen from the day you're born there. Maybe there's some paperwork involved in signing up for coverage or for a particular clinic, which might involve showing proof of what neighborhood you live in so they can tell you which clinic(s) you're allowed to go to -- but there's no magic deadline where you suddenly get left behind and become ineligible for state health care.

What is so complicated about this?

Are Americans really so ignorant that they can't see when they're being scammed?

Any politician or bureaucrat who voted for some kind of nonsensical healthcare "signup deadline" should be fucked, they should be fucked so bad like they've never been fucked before.

Posted by: duh | Nov 14, 2007 10:59:39 AM

Floccina - The reason that LBJ went with Medicare is because it was the only single-payer health insurance he could get past the Republicans. Starting with Truman (and as envisioned by FDR), and in acknowledgment that the Republicans would always resist moving into the 20th century to join every other modern industrialized nation in ensuring universal coverage, Democrats settled for coverage for the elderly. They finally got it in 1965.

The best way to deal with the rest of this disgraceful system is to extend Medicare to all people. Instead, we're likely to end up with another hodge-podge that is attuned more to the insurance company interests than the health insurance needs of the people. And now we're in the third century since universal health coverage began to spread through Europe!

Posted by: kit | Nov 14, 2007 11:18:55 AM

Individual mandates is "it's up to you alone" and "we won't take care of each other." It's individual instead of together. It's a statewide experiment in mandating libertarian ideology -- "if only people would do so-and-so" instead of looking at what people actually DO and going from there.

It is an attempt to transform government from a we're-in-this-together system of the people to a you're-on-your-own system benefiting corporations.

In other countries, you just get health care. The people take care of each other.

"Individual mandate." Mandating that it be up to individuals to get their own health care. What a joke. Of course it can't work.

Posted by: Dave Johnson | Nov 14, 2007 11:52:02 AM

The take up rate is most certainly not 80% or anywhere near that. Follow the Cato link back to the article in Boston Business Journal. It's a little confusing, but here's the deal: the relevant group is people above 300% of the Federal Poverty Level who are uninsured. They can sign up for what's called Commonwealth Choice (while people under 300% FPL can go into the subsidized Commonwealth Care program). Only 18,000 previously uninsured people in the +300% FPL group have signed up. The last estimate of the number of uninsured adults over 300% FPL was about 150,000 (this figure minus the 18K is presumably the source of the Boston Biz Journal article's statement "that could leave as many as 130,000 potential customers for the unsubsidized low-cost, high-deductible products offered by insurers.". 18K out 150K = 12%, not 80%, or even 50% as the Cato post says.

Posted by: P | Nov 14, 2007 11:58:02 AM

I'd guess that many of those people in need of insurance are out of a job and quite possibly depressed. As fun as it may be to blame people for their own troubles, depression can make it difficult for some people to take care of themselves.

Posted by: pete the butcher | Nov 14, 2007 12:01:22 PM

LBJ did not need the GOP to pass anything.

Posted by: Floccina | Nov 14, 2007 12:02:17 PM

I'd guess that many of those people in need of insurance are out of a job and quite possibly depressed. As fun as it may be to blame people for their own troubles, depression can make it difficult for some people to take care of themselves.

Posted by: pete the butcher | Nov 14, 2007 12:02:39 PM

The enactment of Medicare during the Democratic administration of Lyndon Johnson was the high water mark of liberal social reform in the post-Word War II period. Even then, it faced fierce opposition from more right-wing sections of the ruling class and the political establishment.

At that time, universal health coverage was a standard plank in the program of the Democratic Party. The institution of government-managed health care limited to those over age 65 was justified as a temporary compromise dictated by political realities. Democrats generally presented the health plan for seniors as the first step toward a system of universal health insurance. In the event, Medicare was the last major social reform covering all income groups to be enacted in the United States.

http://www.wsws.org/articles/2003/nov2003/medi-n26.shtml

My memory is somewhat vague, but as a leading edge baby boomer I lived through that time and watched the legislation being made. At the time, there were many, many stories and statistics about retirees not seeking health care since they could not afford it--and it did lead to a reduction in the "surplus population," if the early Scrooge approac is to your taste.

It was not a move to seek votes from the old--it was move to provide universal health care. And the AMA and ReThugs of that time worked tireless against it. The AMA is not so much against it now--the ReThugs would like to see it and SocSec destroyed.

Posted by: jawbone | Nov 14, 2007 12:16:55 PM

Dave Johnson the all for one and one for all argument will fail unless you explain why it is important in healthcare and not in other things. In fact many other things have a higher overall impact on overall health than does healthcare. That despite the fact that we are not even health maximizers but pleasure maximizers.

One thing about health that is different is that I think (someone could verify this) some people are born with conditions that make their healthcare expenses orders of magnitude higher than others (there is Medicare for this though). Should we maximize years of life and health saved per dollar even if it means letting these people suffer? How does France (France does medicine cheap) handle this?

Another problem with our current healthcare system is that we seem to spending much more than the optimal amount on healthcare.

Posted by: Floccina | Nov 14, 2007 12:20:59 PM

The take up rate is most certainly not 80% or anywhere near that. Follow the Cato link back to the article in Boston Business Journal. It's a little confusing, but here's the deal:

Um, no, P, that is not "the deal." The 18k figure refers only to the private sector high-deductible plans offered to people over 300% of the FPL. If you read through the Boston Business Journal article, you eventually arrive at this:

But as many as 200,000 people remain uninsured, according to some estimates, and state officials are still trying to figure out how many qualify for subsidized insurance, Medicaid, or the unsubsidized products.

Which would imply that at least 300,000 Mass. residents -- or about 60% of the pool of those previously uninsured -- have obtained health insurance coverage since the legislation became effective. Now, there are obviously a number of paths to becoming insured. Some people have become employed by companies that offer coverage; some have opted for workplace coverage who previously eschewed it; some have obtained coverage through family members; some have obtained it through Medicaid or through the state's plan for moderate income residents (ie., < 300% of FPL). The point is, Massachusetts has seen a pretty substantial drop in the number of uninsured residents, and its insured rate (according to my calculations) now approaches 96%. And that's been accomplished via the use of a measly $200 penalty. As that penalty increases substantially in the coming years, that "96" will approach "100."

Posted by: Jasper | Nov 14, 2007 12:22:40 PM

It was not a move to seek votes from the old--it was move to provide universal health care. And the AMA and ReThugs of that time worked tireless against it. The AMA is not so much against it now--the ReThugs would like to see it and SocSec destroyed.

Maybe it was not planned but it is funny how it always works out that way.

Posted by: Floccina | Nov 14, 2007 12:26:34 PM

"They're" should be "there" in the last sentence.

Off to help others!

Posted by: tomemos | Nov 14, 2007 1:02:38 PM

you all miss the most important point.

we do not have a health coverage crisis. it's a problem, but it's only a small part of the real problem.

which is the health care crisis. forcing people to buy private insurance on the free market is not the solution.

Posted by: dirk gently | Nov 14, 2007 1:25:14 PM

Jasper, that's what I said, the article is really talking about the >300% FPL group, but is not being very clear about it. The overall number of uninsured in MA is a matter of great debate. The most recent state survey, done by the Department of Health Care Finance and Policy, found 355,000 uninsured (or 5.7%), but other surveys have come up with much bigger numbers - CPS, for example, found 657,000/10.4% (there are various differences in measurement period and methods, however).

Unfortunately, there is not any evidence to back up your statement that 300,000 people have obtained insurance (in the sense of the number of uninsured being reduced by 300,000 from a previous point in time estimate). The most optimistic set of numbers is the DHCFP survey, and the most recent # (the 355,000 referenced above) is down only 40,000 on the previous year's figure (which was itself revised from the initial estimate of 372K to 395K).

Part of the confusion stems from the different policies and rules that the various income groups face. The vast majority - roughly 80% - of Commonwealth Care members pay no premiums at all, and a big chunk of this group was in fact auto-enrolled in the new program (from another state program called the Uncompensated Care Pool).

The best part of MA health reform by far has been the fact that it's a de facto Medicaid expansion - much needed, and does a lot of good. The part that's dicey is the business of getting those healthy folks with >300% FPL incomes to sign up, and so far, there hasn't been much take-up.

Hope this helps.

Posted by: P | Nov 14, 2007 2:00:00 PM

I am one of those Mass residents, who is out of a job, and who will not take step one to get Govt mandated health insurance. I'll gladly pay the penalty.
I'd rather pay a penalty for no insurance than end up on the street because I had to make the choice of insurance vs rent.

Posted by: Richterscale | Nov 14, 2007 2:07:13 PM

Richterscale,
If you are out of work and thus make less than 300 percent of poverty, or whatever the lower limit is, why don't you try to get the insurance plan offered to people who *don't have any money* instead of arguing that you would be forced to choose between insurance coverage and rent? I have some really, really, sad news for you--even though you are out of a job you can still get into a catastrophic accident or get sick and need medical care. Who is supposed to pick up the tab for you when that happens?

That being said I think the whole individual mandate thing is nuts. I think we need an NHS or the French system in which everyone simply *is signed up* and everyone with an income pays something into the kitty for the coverage they are all inevitably going to need at some point in their life. I run a family of four and I can assure the doubters that health care isn't a luxury good or a discretionary part of our lives. Without age appropriate regular health care the children couldn't stay in school and receive an education so they can grow up to become tax paying and productive members of society. Without health care my spouse and I wouldn't be able to work and perform out tasks. We don't go to the doctor for anything but necessities and even those aren't covered, necessarily, by the insurance we do have. I shudder to think what happens in the event of a catastrophic or even just long term health issues.

aimai

Posted by: aimai | Nov 14, 2007 2:18:23 PM

http://www.nytimes.com/2007/05/17/business/17quality.html
In Bid for Better Care, Surgery With a Warranty
Kalim A. Bhatti for The New York Times

By REED ABELSON
Published: May 17, 2007
What if medical care came with a 90-day warranty?

That is what a hospital group in central Pennsylvania is trying to learn in an experiment that some experts say is a radically new way to encourage hospitals and doctors to provide high-quality care that can avoid costly mistakes.

The group, Geisinger Health System, has overhauled its approach to surgery. And taking a cue from the makers of television sets, washing machines and consumer products, Geisinger essentially guarantees its workmanship, charging a flat fee that includes 90 days of follow-up treatment.

Posted by: Floccina | Nov 14, 2007 2:36:38 PM

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