« Who You Gonna Call | Main | And There's That Catch »

Massachusetts

06 Dec 2007 01:59 pm

Ezra Klein posts a missive from MIT's Jonathan Gruber that, among other things, goes into some detail about what's happening in Massachusetts:

[Kit Seelye] then cites the experience of Massachusetts, where I serve on the Connector Board that is implementing our ambitious health reform passed in 2006. She correctly points out that, as part of a compromise last year, we exempted almost 20% of uninsured adults from mandated coverage. But half of these are low income individuals offered employer insurance who can be covered as part of the law, but for whom we have not yet had time to design an appropriate subsidy program. The other half are individuals above three times the poverty line who are excluded from subsidies through a compromise between then Governor Romney and our legislature. If subsidies were extended further, exemptions would have been unnecessary. Candidates Clinton and Edwards have said that under their plans all individuals would be subsidized so that no one has to pay an unaffordable amount for insurance. She has laid out no specific plans for mandate exemptions, and there is no reason why she should be tarred by what we have done under the constraints of our Massachusetts law.

This is a good double-corrective. On the one hand, the problems with the system in Massachusetts aren't as clear an indictment of the mandate-regulate-subsidize approach as I might have thought. on the other hand, this seems to me to emphasize the idea that the as-yet-undefined parts of the health care plans -- the scale of subsidies -- are very, very, very important to knowing what they look like in practice. The candidates are correct not to have attached meaningless numbers to their plans that'll just get washed away in congressional bargaining, but it's still worth recalling that this could go in any number of ways in practice depending on the balance of power in the congress.

Share This

Comments (12)

She correctly points out that, as part of a compromise last year, we exempted almost 20% of uninsured adults from mandated coverage.

Actually, her piece in yesterday's Times erroneously states: About 20 percent of people in that state do not have health insurance even with the mandate.

http://www.nytimes.com/2007/12/05/us/politics/05truth.html?_r=1&oref=slogin

The real number is something along the lines of 5%.

If she's writing for The New York Times, I should be editing Vanity Fair.

Gruber's claim (echoing Krugman) that the mandate is necessary to prevent free riding under a policy of community rating and must-issue is false. The free rider problem could be addressed by imposing a penalty on those who fail to purchase insurance if they purchase it later in order to make a claim. That would preserve the right of individuals to choose for themselves whether to buy insurance without giving them a free ride if they subsequently decide to buy it because they get sick.

Some might be interested in my approach. It couldn't effectively be applied at the state level, I think, but maybe some presidential candidate could pick up on it.

www.plan.bipartisanhealthplan.com

Gruber said that 20% of people in MA were exempted from the mandate in MA.

How will Hillary enforce her plan's individual mandate? I don't know the answer to this question, and neither do you, so until we find out, suggesting that the compliance rates under her plan will be high is pure speculation.

Gruber said that 20% of people in MA were exempted from the mandate in MA.

How will Hillary enforce her plan's individual mandate? I don't know the answer to this question, and neither do you, so until we find out, suggesting that the compliance rates under her plan will be high is pure speculation.

The free rider problem could be addressed by imposing a penalty on those who fail to purchase insurance if they purchase it later in order to make a claim.

Unless you're going to enforce the mandate with jail time or something equally silly, this sort of penalty system ends up looking exactly like a mandate to me.

Mixner, that's essentially a mandate. Since 98% of Americans could not afford care for any serious medical problem.

How is it "essentially a mandate?" The penalty would only be imposed on those individuals who would otherwise receive the free rider benefit from making a claim. A mandate, in contrast, imposes a cost regardless of claims.

I still think the emphasis of this discussion is misplaced. The biggest problem with health care is the ever-spiralling cost. If you promise to subsidize everyone who needs it as cost continues to rise and rise, you'll end up bankrupting the government, raising taxes to levels this country won't support, or failing.

To me, the first thing we should be doing is comparing how effective and politically possible their cost containment measures are. I haven't seen anyone tackle this yet.

The mandate question is minor in comparison. Clinton and Edwards have said they definitely support a mandate, and Obama has said he's willing to support a mandate if one becomes needed. This is not a substantive difference, and not where the discussion should be focussed.

But Mixner, if they are making a claim after they need health care--which means they can't afford the out-of-pocket costs for their need--how are they going to pay your penalty too, in addition to their new-found health care premiums? On a 48-month installment plan? And if they don't (can't), what is the penalty?

How do you know they can't afford the out-of-pocket costs? If buying insurance would save them money (thanks to community rating and must-issue), they're likely to buy it whether they can afford to pay out-of-pocket or not. But if they can't afford the premium and penalty, tough. They'll have to spend their own money until they're poor enough to qualify for government aid. That's the risk they take for choosing not to buy insurance in the first place. Just as someone today who chooses not to buy insurance assumes that risk. The point of the penalty is to eliminate the free rider benefit without depriving individuals of the right to choose their level of risk. A mandate wouldn't do that.

all individuals would be subsidized so that no one has to pay an unaffordable amount for insurance.

I don't know exactly what this means, but it sounds pretty close to wishing for a pony.


Comments closed December 20, 2007.

Copyright © 2008 by The Atlantic Monthly Group. All rights reserved.