Massachusetts Health "Plan"
By Arnold Kling
I don’t know exactly what the legislators of Massachusetts voted for, and I suspect that neither do they. Here is the story.
The measure does not call for new taxes, but would require businesses that do not offer insurance to pay an $295 annual fee per employee.
…The state’s poorest are the biggest winners. Single adults making $9,500 or less a year will have access to health coverage with no premiums or deductibles.
Those living at up to 300 percent of the federal poverty level, about $48,000 for a family of three, are also big winners. Under the bill, they will be able to get health coverage on a sliding scale also with no deductibles.
Massachusetts is a state where health care spending averages over $6000 per year per person. My guess is that a $295 per year penalty is not enough to convince an employer to offer health insurance to an employee. Particularly if the employee qualifies for some sort of plan that is subsidized by the state.
Another feature of the plan is that individuals must obtain health insurance or pay a penalty. In a previous version, you could avoid paying for health insurance by posting a bond that guaranteed that if you were treated you would pay. I wonder if that option survived in the final bill.
The wording that stands out in the story on the legislation is “no deductibles.” Thus, Massachusetts appears to be taking a strong stand in favor of what I call “insulating” people from health care costs and against what I call “real health insurance.”
Those of us who favor market-oriented health care believe that deductibles are too low as it is. But Massachusetts wants to enshrine no-deductible health care plans.
The Governor of Massachusetts, a
national socialist Republican with Presidential ambitions, plans to sign the legislation. I hope that we have at least five years to observe what this does to Massachusetts before somebody decides to implement it nationwide.