Massachusetts Health Reform Failure
By Arnold Kling
Meanwhile, few of the near-poor uninsured seem able to afford even the newly subsidized policies, and the federal funds providing the bulk of the subsidies are set to expire in 2008. The unsubsidized coverage mandated for middle-income individuals (most of whom have incomes between $30,000 and $50,000) offers a bitter choice between unaffordable premiums (at least $7,200 for comprehensive coverage for a single 56-year-old) or plans so skimpy (e.g., a $2,000 per person deductible with 20% coinsurance for hospital care after that) that they hardly qualify as insurance. The religious coalition that was key to passage of the legislation has already called for a delay in enforcement of the individual mandate, fearing that it will place unbearable financial stress on many of the uninsured. In sum, neither government, nor employers, nor the uninsured themselves have pockets deep enough to sustain coverage expansion in the face of rising costs.
Re-read the last sentence. That diagnosis is spot-on, in my view. Their prescription is a full government takeover a health finance, to eliminate the administrative overhead and profits of private health insurance.
I would like to see that tried, but only in some states. I would like to see other states try radical health reform of the opposite kind, with health insurance deregulated and major rollbacks of licensing requirements. Then we’ll see which performs better over the long term.
The benefit of experimenting at the state level is illustrated by the findings in the paper. The reforms that are failing at the state level are the ones that many folks are advocating at the national level.