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Gee, What A Surprise...

Well, it's been about a year since Massachusetts mandated that everyone get health insurance, and how's it working out?

In a move that no one foresaw (except those with a modicum of common sense), numerous businesses that found themselves facing hefty bills for covering employees they had not had to cover before. And some of them found some truly novel ways to avoid -- or minimize -- the hit.

After all, when a business faces a new set of expenses, who could possibly expect them to do all they could within the law to minimize their costs? Inconceivable!

One company had been offering full coverage for all its salaried employees, and picked up the full tab. Now by law they have to offer coverage for all full-time employees, and they all have to have access to the same plans. So now anyone who wants coverage has to pay half the bill -- including those who'd been covered 100% before.

Another saw that companies with fewer than 11 employees were exempt, so it split itself into a bunch of smaller companies, each with 10 or fewer employees.

One company ran the numbers and saw that the fines for not offering insurance was less than the premiums would have been -- so they chose to take the hit.

Another "perverse incentive" was for companies to attempt to help their workers by denying them access to the company's health plan. Under the law, anyone who could sign up for insurance through their work -- no matter how high the premiums -- was ineligible for the state-sponsored programs. So one company jacked up the minimum hours needed to qualify for access from 20 hours a week to 30 -- because it knew that many of its employees simply could not afford the premiums, but would not be eligible for the state programs.

The original idea behind Massachusetts' "health insurance for all" plan was a fine, noble one. It was also colossally stupid.

First of all, there are valid reasons why someone would choose to go without health insurance. A lot of young people, for example, are healthy and would rather spend their money on other things -- or save it.

More importantly, they don't have to have a valid reason. "I don't want it" should be a perfectly valid answer to most attempts by the government to "help" people.

Yes, for the vast majority of people, having health insurance is a good thing. Lord knows I'd be in a world of trouble without mine. But attempting to ram it down everyone's throat in a "one size fits all" solution is just going to cause far more problems than it's worth.

I keep wondering at what point insurance companies will simply decide that doing business in Massachusetts (which is rapidly becoming "doing business WITH Massachusetts," as the commonwealth intervenes more and more) is more hassle than it's worth. What then will they do?


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Comments (13)

"What then will they do?... (Below threshold)

"What then will they do?"

They'll move to Florida and continue to vote Democrat as individuals? Never realizing the link between their voting practices and the resulting mess.

The "I don't want it" reaso... (Below threshold)

The "I don't want it" reason for not being insured is fine and dandy, until the young person ends up in the ICU after a motorcycle accident in which he wasn't wearing a helmet -- and the cost of his care comes out of the Free Care & Bad Debt Pool, i.e., all of us. If I thought that people who can afford insurance and choose not to carry it would cowboy up and pay their debts when their gamble loses,'that'd be great. But a lot of them don't. Especially here. And hospitals are the worst debt collectors around.

I agree totally with wavema... (Below threshold)
epador:

I agree totally with wavemaker EXCEPT for one thing. Our hospital here is legendary with its debt collectors. Of course that doesn't deter the bloodless rocks from overutilizing its resources, but the working uninsured DREAD coming to the hospital here.

They'll move to Fl... (Below threshold)
jpm100:
They'll move to Florida and continue to vote Democrat as individuals? Never realizing the link between their voting practices and the resulting mess.
Unfortunately this too true in too many circumstances, not just Mass's health care.
following up on wavemaker's... (Below threshold)

following up on wavemaker's comment, if society was willing and able to say "sorry, but no, we're not paying, you're out of luck" to those who incur medical costs but have chosen to do without insurance, then sure, let them go without. But society isn't going to do that, so I see nothing wrong with society, in return for its promise to pick up the bills, requiring people to cover themselves to the extent they can do so.

Give them an inch, and they... (Below threshold)
Maggie:

Give them an inch, and they'll take a
mile. Every time.
When medical insurance companies bail on
taxachuesets'emup, what's the state going
to do? Open their own insurance business
and then tax the hell out of everyone?
Kind of reminds me of the socialist state
of Sweden. Does that come with toilet paper?

Cumpulsory insurance is not... (Below threshold)
eman:

Cumpulsory insurance is not the answer. The free market is the answer. Medical savings accounts, payment plans, taking a fraction of future wages, more flexible insurance plans, etc. are better because they balance freedom and resposibility in a way compulsory insurance never can.

If compulsory is a bad idea... (Below threshold)

If compulsory is a bad idea, then compulsory insurance via employers is a terrible idea. I work with a woman who is treated like dog-meat because her daughter has some kind of long-term illness and she is reliant upon the company to maintain her health coverage. If this woman had a Medical Savings account, she could tell her boss to go jump in a lake without worrying about being excluded from a future employers health plan.

And the Law of Unintended C... (Below threshold)

And the Law of Unintended Consequences rears its ugly head again...

Keeping oneself out of medi... (Below threshold)
BlueNight:

Keeping oneself out of medical insurance because one is young and healthy is a terrible idea.

If only risky drivers (those drivers who already had one accident, or were younger than 25 or over 65) were required to maintain auto insurance coverage, we'd have an analogous mess: far more expensive coverage, with higher deductibles, and more accidents outside the system that go un-paid-for.

That said, I'm glad I work for a company whose profit margin is high enough to pay medical without a hit on our paychecks. Many people work for less profitable companies, and must pay a portion of health care out of their paycheck.

If there's a problem, and y... (Below threshold)

If there's a problem, and you wish to turn it into a crisis, call in the consultants. If you wish to turn it into a total catastrophe, call in the government.

The odds of an uninsured healthy young person becoming an indigent ward of the state are rather long. Requiring all such people to buy insurance because a tiny fraction will need it is not cost-effective. It is in fact much cheaper for the economy for the government to tax the rest of us to pay for the expenses of the rare cases than to misdirect the resources of a large class of people to avoid it.

The problem with health care costs is the perception of third-party payers. Those who are insured through work don't feel as if they are paying for the services, so they use them freely and clamor for more benefits.

Health insurance provided by employers came into mainstream practice after WWII, when wage controls limited the bidding war for new talent, but "fringe benefits" weren't counted towards the caps OR taxed as income. Now, if you get a company car, the value of your use of it is taxed as income, as are most other benefits - except employer-paid insurance.

It's a tangible transfer of wealth, and should be taxed as income. This will bring the consumer closer to the cost. (Government-paid benefits should also count as income against eligibility for other programs). Once the people who use the health care services perceive that they are paying for them, costs will be brought under control naturally.

Which will engender a larger bill: me going out on the town at my own expense, or you giving me your credit card and saying, "Have a good time!"?

The individual citizen cann... (Below threshold)
David Adams:

The individual citizen cannot split himself into ten parts or play the games businesses do.
That's who will wind up bearing the brunt of the costs and failures of this state-run program. What will this program look like in four years if businesses can already find ways around it? How many citizens will have been fined, jailed or involved in lawsuits involving constitutional rights.

Wavemaker:Said you... (Below threshold)
John S:

Wavemaker:

Said young person won't be in a motorcycle accident in which he wasn't wearing a helmet. The People's Republic of Massachusetts has a mandatory helmet law along with a law for EVERYTHING ELSE. Jay missed the best strategy to avoid Romney-care, simply move the company and the jobs to N.H. (or China). By election day this joke of a policy should be a $250 million in the hole. I suspect doubling the Mass. income tax to 10% should cover it, though...




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