Massachusetts Pretends To Fix Health Care

A new health care plan intended to provide universal coverage has just passed the Massachusetts legislature (see here and here for more details). The plan is a joint effort between Republican Governor Mitt Romney and the Democratic legislature. I wish I could call this plan good news, but I have major reservations to the strategy Massachussets has embraced. Their approach to expanding coverage is the "individual mandate" system. It follows the model of car insurance in requiring that all citizens purchase health insurance. If you don't buy it, you are penalized at tax time.

The obvious question is to ask how people who can't afford health care going to be able to buy it. Massachusetts attempts to deal with this problem by subsidizing private insurers and penalizing employers who don't provide it (to the tune of $295 a month). Children will be eligible for medicaid.

I haven't read the fine details of the proposal, but it looks fatally flawed to me. There are no cost controls, no hard cap on premiums or co-pays, and all the subsidies are to insurance companies rather than to individuals. Also, the penalty to businesses is probably less than the cost of insurance, so they'll just ignore it and pay the fine. So there is a distinct possibility that, like the Medicare Part D fiasco, all this plan will do is shovel money into the pockets of the one of the nation's most profitable industries. The plan also does nothing to alleviate the crippling burden of providing health care from American's business commmunity.

But it's not just the specifics of the plan that are problematic - the entire approach to the health care crisis is mistaken. First, it assumes that most of the people who don't have health insurance could afford it if they want it to - which I doubt to be the case. Second, like privatizing social security, Medicare Part D, and school choice, this plan is yet another example of the conservative public policy ideology of focusing on individual behavior. And in each case this strategy has been a complete disaster. Substantively, it ignores the structural causes of the problem it seeks to address. Philosophically, it abandons the idea that we have a collective responsibility to each other.

It's not that people don't have health care because they are lazy or irresponsible. People don't have health care because they can't afford it. I didn't have health care until very recently. I was young and healthy, and therefore would seem to be taking a big risk. On the surface I would appear to fit into the conservative case of the young, shiftless free-rider. But the reality is that I didn't choose not to have health insurance. I didn't have insurance because I didn't have the money.

If this plan goes into effect, and (God forbid) goes national, then here is my prediction: health care costs will continue their dizzying rise. Insurance companies will use their lobbying power and the lack of regulation to keep jacking up premiums, co-pays, and deductibles. Individuals will no longer be able to fork over the money to pay for health insurance, and as a consequence they will see their tax burden go up. The end result will be a massive tax increase on the bottom 3/5ths of society (and small businesses) for the purposes of providing a public subsidy to insurance companies - already one of the country's most profitable industries.

What a plan.