Take Out Some Insurance on Me, Baby

Massachusetts' new health insurance program is certain to be examined closely by other states -- at least that's my ardent hope.

While the landmark healthcare plan is likely to play into Massachusetts Gov. Mitt Romney's expected 2008 presidential bid, the initiative has more important implications for a nation seemingly unable to lift itself from the quagmire of skyrocketing health insurance costs.

The New York Times reports:

"The law is projected to provide coverage for about 515,000 of the state's 550,000 uninsured people and leave less than 1 percent of the population uncovered. It goes further than those of any other state.

"It requires residents to obtain health insurance by July 1, 2007. People who can afford insurance and do not buy it will be penalized on their state income taxes.

"The law takes the $1 billion in the state's free-care pool, which paid for medical care for patients without insurance, and uses it to subsidize insurance for people who cannot afford it. The legislation also makes it possible for more individuals and businesses to buy insurance with pre-tax dollars, saving them money. And it includes a system to encourage insurance companies to provide more affordable plans with fewer benefits or higher deductibles."

One provision we here at CTTC particularly dig is that it penalizes businesses (with more than 11 workers) that can afford to provide health insurance for their employees but fail to do so. Although Romney vetoed the specific section, the Democratic-controlled state legislature has indicated it will soon override the veto. The governor is correct that the penalty -- $295 per employee annually -- is too meager to be much of an incentive for businesses to comply -- but it makes an important statement about the responsibility of employers and would help finance a healthcare law that is certain to get more expensive as time goes on.

Is the plan perfect? Nope. Even proponents of the Massachusetts law fret that adequate funding is only assured for a few years, particularly since no one knows how ever-climbing medical inflation will impact things in the future.

The Boston Globe notes such concerns:

"A legislative staff analysis estimates that the groundbreaking healthcare plan would start losing money in two to three years, which could put pressure on lawmakers to spend more tax money, increase the fee on businesses or scale back the coverage of the sweeping bill. The analysis projects that the plan will be about $160 million short of its estimated cost of $1.56 billion in the fiscal year that starts July 1, 2008."

Nevertheless, this ambitious plan should jump-start serious moves by other states to do something, something dramatic and meaningful After all, most states require car insurance if you get behind the steering wheel. Why not health insurance? What is the rationale of forcing those of us who pay our health insurance premiums to shoulder the costs of medical care for those who can afford health insurance but, for whatever reason, don't have it?