KOK Edit: Your favorite copyeditor since 1984(SM)
KOK Edit: your favorite copyeditor since 1984(SM) KOK Edit: your favorite copyeditor since 1984(SM) Katharine O'Moore Klopf

Thursday, April 06, 2006

Will the Massachusetts Health Insurance Plan Work?

This week, Anonymous posted a comment here:

I'm curious what you think of the ... Massachusetts legislation [link added] requiring health care for all. I haven't looked at it too much since I don't live there. Have you? If so, would similar legislation in NY State have helped you out, or would you still make too much money to get much help?

The answer: If my family and I lived in Massachusetts, we wouldn’t qualify for either the state Medicaid program or for the state’s subsidizing of our health care insurance premiums. That’s because our annual income is more than 300% of the federal poverty level, which is about $50,000 for a family of three, according to the Boston Globe, and would extrapolate to about $67,000 for a family of four, like mine. But if you read EditorMom regularly, you know what we’ve gone through to find affordable—that’s not to say efficient and patient-friendly—health care.

I’m glad to hear that at least one state is trying to make sure most of its residents have health insurance. It’s about damn time. I’m just not sure how well the Massachusetts plan will work. Here’s how it’s supposed to work, says the Globe:

The bill, the product of months of wrangling between legislators and the governor, requires all Massachusetts residents to obtain health coverage by July 1, 2007.

Individuals who can afford private insurance will be penalized on their state income taxes if they do not purchase it. Government subsidies to private insurance plans will allow more of the working poor to buy insurance and will expand the number of children who are eligible for free coverage. Businesses with more than 10 workers that do not provide insurance will be assessed up to $295 per employee per year.

All told, the plan is expected to cover 515,000 uninsured people within three years, about 95 percent of the state's uninsured population, legislators said, leaving less than 1 percent of the population unprotected.

But a Massachusetts resident’s earning an income that puts her above the federal poverty level doesn’t necessarily mean she can afford to buy her own health insurance. What if she’s a single mother who owns a small home and is putting a child through college? If we extrapolate again from the poverty-level figure reported in the Globe, this single mother with one child would be earning about $33,000 a year. What should she give up to be able to afford insurance: A stable place for her and her child to live? Her child’s education, which may condemn that child to a subsistence-pay job? Payments on the used car she bought to get her to and from work? Heating and electricity?

Massachusetts legislators have said that they expect the average monthly premiums under the new plan to be about $325 for individuals and about twice that for families. Now, I’m not that hypothetical single mother—though I once was here on New York State’s very expensive Long Island and I couldn’t afford anything more than an illegal garage apartment—but don’t you think that $650 a month for insurance (twice the postulated premium for individuals) is a hell of a lot of money? My husband and I together make monthly mortgage payments of about $1,300. That Massachusetts family premium is half a mortgage, if it’s for a small 1,400-square-foot home like the one I own. How in blazes would my hypothetical single mom afford a mortgage and a half?

What I think has to happen is the creation of a federal single-payer system. It would be financed by every income earner’s having a specified amount, based on annual earnings, deducted each pay period from his or her paycheck and every self-employed person’s making payments to the insurance system at the same time that he or she makes quarterly estimated tax payments to the feds and the state (if living in a place with state income taxes). Medicare could be revamped to be the system’s insurance provider.

This can happen, but only if Congress pays attention to the fact that three states (Maine, California, and Massachusetts) have been making serious efforts to fix the train wreck of a health care system that we have. Want to get motivated to push Congress enough to do something? Think about this: Most members of Congress pay premiums that are ridiculously low [rate info provided by the U.S. Office of Personnel Management, the human resources department for the federal government] when compared with their salaries.

health care insurance self-employed Massachusetts Congress EditorMom


John said...

The single mother who suddenly has to come up with $650 a month for health insurance might give some thought to moving to a neighboring state from which she could commute to a job in Massachusetts. $650 can be a very large percentage of a person's income.

Katharine O'Moore-Klopf said...

It certainly can be, John!

Anonymous said...

Hmm. As I suspected. I will watch the situation with interest. Who decides whether or not you can afford a plan? Will legislators encourage health plan administrators to lower their costs?

Katharine O'Moore-Klopf said...

I suspect the state tax department will decide, and levy the financial penalty imposed by law for not carrying insurance. I'm sure there will be incentives for plan administrators to lower costs. And did you know that companies with more than 10 employees will be required to offer insurance to their employees? If they don't, they'll be assessed a penalty of only about $300 (!) per employee per year, which will go into the health care coverage pool. Three hundred a year won't buy anybody any kind of health care at all!

Anonymous said...

A $300/head penalty is absurdly low. I suppose it's a start.

Katharine O'Moore-Klopf said...

I agree that it's ridiculous, Anon. For there to be enough money in the state pool to provide very basic health care coverage for all those who can't afford insurance, I think employers would need to pay $300/head per month.

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