SANTA MONICA, Calif., Jan. 11 Penalties must be"mean" or people will not be compelled to buy health insurance under theMassachusetts mandatory purchase law, according to a proponent of the law whoalso did the financial projections for a similar plan pending in California.
As reported in the Boston Globe, Jonathan Gruber, a member of theMassachusetts board responsible for implementing the plan, said, "The mandatehas to be enforced ... We need to think beyond what looks mean and do what'sright."
"If the state has to be 'mean' by requiring steep punitive fines to getpeople to buy unaffordable health insurance, the mandatory purchase regimeisn't working," said Carmen Balber with the nonprofit Foundation for Taxpayerand Consumer Rights (FTCR). "When premiums, co-pays and deductibles quicklyadd up to 10% and more of a family's income, it's no wonder Massachusettsconsumers are choosing not to buy high cost private insurance."
Gruber argued that proposed penalties, as high as $912 per person, peryear, are not large enough to force individuals to buy insurance rather thanpay the penalty under Massachusetts' mandatory purchase law.
Signs are that California Senate resistance to a similar health plan iscrumbling. Commentators reported that California Senate Leader Don Perata madecomments yesterday that suggested he expected the bill to clear his house. Thecomments came after the legislation's leading proponent, the Service EmployeesInternational Union, made $450,000 in contributions this week to a campaigncommittee supporting Proposition 93, the measure that would extend the termsof legislative incumbents including Senator Perata. The committee has ties tothe Senate leader.
FTCR sent a letter to the Senate Health committee yesterday pointing outthe extensive failures in Massachusetts and costs of such a plan forCalifornia:http://www.consumerwatchdog.org/resources/KuehlLetterOpposeABX1_1.pdf
California's bill proposes assigning patients who don't buy insurance to aplan, then collecting payment from them later, but does not detail theenforcement mechanism.
"Governor Schwarzenegger and Speaker Nunez are trying to pretend we won'tbe faced with the same decision they're making in Massachusetts: enactpenalties that are harsh enough to force people to buy health insurance theycan't afford, or admit that a mandate does not mean universal health coverage.California politicians are denying the ugly reality of the mandate until afterthe votes are cast," said Jerry Flanagan with FTCR.
Massachusetts has already exempted almost 20% of uninsured adults whodon't qualify for subsidies because the mandated insurance is too expensive,and health plans are unaffordable for many who are not exempted. For example,a 55-year-old in Boston would pay $4510 in premiums per year, and a $2000deductible, or 13% of a $50,000 income.
The Massachusetts law also faces an affordability crisis, with costsprojected to increase up to 14% next year, employers paying a fraction of theamount expected, and expenditures for state-subsidized care 30% higher thanprojected.Read the Boston Globe story:http://www.boston.com/news/local/articles/2008/01/11/health_insurance_penalties_too_low_panel_official_says/(Due to length of URL, please cut and paste into browser.)
SOURCE Foundation for Taxpayer and Consumer Rights