Individual Mandates: Expensive Policy Failure And Bonanza For Insurers And Market Stakeholders

[eridani]

Why not cure homelessness by fining people for not buying or renting houses?

http://www.pnhp.org/blog/2009/07/23/individual-mandates-expensive-policy-failure-and-bonanza-for-insurers-and-market-stakeholders/

We’ve been here before. With much fanfare, health insurance mandates were enacted by Massachusetts in 2006 and touted by many as an effective model to reform health care. After three years’ experience, here is what the “Massachusetts Miracle” tells us about mandates and their costs.

• only about one-half of the previously uninsured now have some coverage.

• The public “Connector” established to implement the program has added another layer of 4 to 5 percent overhead without enough leverage to rein in costs of private insurers.

• As health insurance and out-of-pocket health care costs take up 15 percent or more of their family income, many people still forego needed care because of costs.

• the State has had to exclude many people from the program, the cost of subsidies (for those earning up to three times the federal poverty level) are much higher than anticipated, and the costs of health care continue to soar out of control (Massachusetts pays one-third more per person than the national average).

• In its budget crisis since the Fall of 2008, in order to keep the program going, the State has had to cut safety net programs, including providers, emergency rooms, primary care, and chronic mental health services; and coverage of legal immigrants will soon be eliminated.

• In order to try to get a handle on soaring costs and overutilization of health care, the State is now considering a plan to radically change how providers and hospitals are paid, eliminating the customary fee-for-service system and replacing it with some kind of risk-adjusted global payments.

Mandates are not a new idea. They have been tried in a number of other states, including California, Oregon, Pennsylvania and Maine. The results in Maine are no better than they are in Massachusetts. As a state with a large rural, poor and elderly population and an economy based on small business, employer-based insurance coverage is limited. The State enacted a law in 2003 with the goal of covering all 130,000 uninsured residents by this year. It has also failed:
• the plan now covers only a small fraction of the target population.
• the State had to cap enrollment due to financing problems.
• Most private insurers have left the state, and the dominant insurer has priced coverage in the individual market beyond the reach of most uninsured.

So we already know that mandates don’t work as well as their supporters claim. They have not resulted in universal coverage in any state. They are complex, very expensive, not sustainable, and have unforeseen unintended consequences.

[ejpoeta]

1. here is what pisses me off about mandates....

I am going to guess that 98% of people who are uninsured aren't uninsured because they want to be. Most of them are uninsured because they can't afford to pay the cost of the insurance. so they play a gambling game that they will probably eventually lose. The rest of them probably don't even have access to insurance because they are unemployed and the cost is even worse than it would have been had they had a job. I guess that's the problem with having insurance tied to a job. People lose their jobs. People may not even have a job.... and then what do they do!!!

I should know. I have played that gambling game. We had a daughter and no insurance for any of us. So you hold your breath and pray that that fever is nothing. You hold your breath and pray that they don't break their leg or arm or something. Not because you are just out spending like you are rich and not bothering to get insured... but because you can't even pay your bills every month. You are getting shut off notices from the electric company and overdrafting your account every two weeks just to put gas in the car to get to a job who's idea of health insurance is $600/mo and doesn't cover ANYTHING!!

Yes, we are better off then we were back then. And yes, we have insurance now. We had to switch to a cheaper insurance in January because we had Independent Health and it went up another $100 a month.... another increase that we just could not absorb. Maybe if Bob would have gotten a pay raise... But there were no pay raises this year.... except for the CEO and all the big wigs. They got big bonuses while the little workers got screwed. So we signed the girls up for Child Health Plus, which we could do because our income level was such that we didn't have to have our kids uninsured for six months first. So we pay $9/mo each for the girls to get insured with no copays and the side benefit is that Emily's ritalin time release is no copay either.... otherwise we would have to keep her on the regular ritalin that is generic and you can really tell the difference!!!

But yes, let's mandate buying into this great system we have now. One that people must surely be opting out of just because they would rather spend all that extra cash on flat tvs and vacations. It couldn't be that they opt out simply because they CAN'T opt in the way things are right now. No, that can't be.

[sutz12]

2. Tough times...best of luck to you and yours.

and I would expect that the RWers and opponents would count you among the many who "voluntarily" go without insurance.

Being forced into a decision is no choice at all.

[ejpoeta]

4. yeah, i can either feed my kids or insure them and myself. hmmm...

and the funny thing is.... emily was one of those things that you do not expect. and we had her. we did not have an abortion or anything.... we had her. i left school and got a job so i would have insurance and all that. did the responsible thing, i guess. and then you start down that road of just trying to tread water. and i remember how the insurance just for emy and I went up like every couple of months. I drove an hour to get to my job that paid $7/hr.... got all the way up to $7.40/hr by the time I left a year and a half later. paid $100 a week to a sitter (who wasn't licensed daycare even). there was gas costs.... by the time i got my paycheck i was lucky if i had $50 left!! so that's like $200 a month to pay rent, electricity, groceries... Bob worked too, but we weren't even barely scraping by. I wonder if these people even have any remote idea of what they are talking about. they have no clue.... either that or they have forgotten.

[sutz12]

3. Delete....dupe

n/t

[eridani]

5. Actual sick people in Massachusetts are being badly screwed by this n/t