Blue Mass Group

Reality-based commentary on politics.

Helping write the new health care law

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Last night I attended a workshop on the new health care law, put together by folks from the Greater Boston Interfaith Organization. It was well-attended — about thirty mostly young-ish folks who were curious and invested in how the new health care law will affect them. The main purpose was to anonymously assess people’s finances, and find out what people considered to be an “affordable” health care premium: 1% of income? 8%? If the new rule is that “everyone into the pool”, what’s a fair contribution to require of an individual?

The ensuing discussion brought up these concerns:

  • How will the personal mandate to buy insurance affect young people who do not make a lot of money, and who are often saddled with enormous personal and student debt? Will we actively drive young folks out of the state?
  • What exactly are you getting for your money when you have to buy a supposedly affordable “insurance product”?
  • Why is health care so bloody expensive, anyway?

I came out of the meeting with this thought crystallized: The personal mandate needs to be enforced from the top-down: Make relatively rich people insure themselves first, and leave lower-income folks alone. That leaves a big “doughnut hole” of people just over the income level at which one is subsidized (about $29,000 a year for an individual), but not “rich” enough to really afford coverage. This is still quite cruel to them — no crueler than the status quo, I suppose, but wasn’t the new law supposed to change all that?

The purpose of the individual mandate was to address the problem of “adverse selection”: Certain people (healthy, young, or rich) opt out of buying insurance, and insurance plans keep out people whom they consider to be bad risks. So you’re left with a smaller and smaller group of people who both need and can pay for health care, leading to higher and higher costs.

Insofar as the “personal mandate” gets people into the pool, over time it might result in evening-out premium levels. But for all that the new law was supposed to represent a sharing of burdens between employers and individuals, it still looks like employers came out way, way ahead, and individuals are left with a heavy burden.

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  1. Question 1: yes.

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    Question 2: not much.

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    Question 3: dunno, but I don’t see that changing much anytime soon.

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    I’d really like to know how much of a problem the alleged young, well-off bungee jumpers who opt out of health insurance  really are.  How many of those people are there – and what happens to them when they unexpectedly get sick or hurt?  Are they using free care?  Or do they pay as they go?

  2. I used to design health plans.  Here’s a typical scenario – 20 people.  13 take coverage.  Of the remaining 7, 5 are under 30.  A few weeks after declining coverage, one of them is getting a basketball out of a gutter, falls of the ladder and tears his ACL.  NOW he wants onto the plan.  Can’t, because deadline has gone by.

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    So – free care surgery paid for by you and me.

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    Better still – two plumbers have a secretary, age 24.  She gets pregnant.  Since they don’t HAVE a plan in place, and Kennedy-Kassebaum forbids exclusion of pre-existing conditions, they buy a plan when she is 4 months along, delivery gts paid for, they drop the plan when baby is 6 months old, on its first anniversary.  THEN the baby gets sick – so into free care.

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    These are not made up stories.  They are just two of millions.

    • I’m under 30, with no health insurance.  I haven’t been for a physical in 8 or 9 years, I havent had any medicine – not so much as an asprin – in over 10 years, and I haven’t had a prescription since I was 5.  I’m in tip top health, as was shown by the fact that I swam more than a 1/2 mile into cape cod bay this summer to retrieve a boat that had slipped off its anchor on the beach.

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      I don’t says this to brag, but simply to say that I don’t like the idea of the state FORCING me to pay a premium that I can’t afford every month when I know I won’t be using services.  I can’t afford to get by now working 2 jobs with my mountains of student debt.  Boston is my home, and I’ll never leave, but it might mean my living in a slum somewhere just to get by.

      • And when that mosquito on Cape Cod gives you Triple E?  When you get appendicitis, and need an operation?

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        What then, Mr. Smug and Healthy?

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        It is people like you who think health insurance is only for the currently sick that drive up premiums for us all.

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        This is why I am a fan of the individual mandate, and the employer mandate, too, as the other side of the coin.  It was my profession for over a decade, and when you fall off that bike and break a leg, and discover that an emergency room visit is seven grand, yoy’ll thank us for making you take care of your OWN self.

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        Pity your college didn’t teach you self reliance.  I’d ask for a rebate on those loans.

        • If i break a leg and it cost 7k to fix it, then I’ll (slowly) pay off the bill.  The “affordable” premiums are expected to be at $200-$250 a month.  If I had to pay $250 a month for each of the past 9 years that I haven’t been to the doctors, I would have wasted 27,000.  Thats a savings of $20k.  I’ll take my chances while I am young and healthy.

            • is not even close to free care.  If that’s the best the individual mandate defenders can do, it proves that those of us who hate the goddamned thing were right all along.

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              So I’ll ask my question again: when the young, well-off, uninsured folks get sick or get hurt, what happpens?  The hospital bills them, I assume.  Then what?

            • The hospital/doctor says this bill will be $7K and they set up a bill payment plan. 

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              How do you make the jump that we’re floating a loan? 

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              Would you say the same for any other business that has vendors that pay later than the day of sale?  This is a common business practice and doesn’t involve us at all.

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              And heck, who knows — maybe he put it on his charge card and is paying that off.

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              You’ve missed the forest — he, as a free individual, has saved himself money in the long haul.  Another commenter has an excellent comment on the importance of this freedom further down the thread.

        • but not from those who don’t want a nanny state.

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          Look:

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          The guy did a risk analysis.  He decided that the cost of health care exceeded the cost of an injury.  He’s an adult, and fully capable of making the decision, and it is one he’s willing to live with.

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          What you’re asking is for him to subsidize the insurance of others.  This is the whole strategy of forcing the healthy to buy insurance.  They pay more than they cost now, and when they get old, some other whipper snapper pays for them.  Why should he be [i]forced[/i] to subsidize a private corporation’s insurance rates for its other customers?

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          This “price smoothing” may work best in the aggregate, but there’s a huge disincentive for young people to join: the price implies a risk averseness most young people simply don’t have — nor should they.  They have lots of years to make up a high cost now, have tremendous opportunity and flexibility with careers and schedules, and will have plenty of years to recover from bankruptcy.

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          So, now what?  Here’s what I think should happen: baseline care goes single payer.  What’s baseline care?  A bit of preventative maintainance (physicals) and emergency room care like torn ACLs or appendectimies.  Throw in some dental (low cost, high cost avoidance, a major cause of lack of productivity of the workforce) and you’ve got yourself a program.

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          I’m a liberal, a progressive, a Democrat.  There’s absolutely never an appropriate time for my government to [b]require[/b] me to enter a contract with a private corporation.  [b]Never[/b], even if it does tremendous good to those who are worst off.  I don’t trust a private corporation with my data, my money, or my health, and without the ability to not purchase, they have even less incentive to protect my privacy, my pocketbook, or my person.  Government is accountable to the people, even if indirectly.  Corporations aren’t accountable to anyone but shareholders, and that’s just not good enough protection for me.

          • By the way, you have to use <> rather than [] to get the html to work!  Square brackets are only for the special link formatting that soapblox lets you do instead of having to use the tag.

            • david, you should post a how-to primer on all of the tags and boxes and fancy schmancy html stuff. and maybe the preferred rules of the road to go along with it.
              it seems like there was once something like that posted, but i can’t find it anymore.
              therefore, my posts are more anecdotal than they might otherwise be, because i don’t know how to make the links to my sources.
              and other folks might be having the same issue.

          • What you’re asking is for him to subsidize the insurance of others.

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            No, Stomy, what HE is asking US to do is subsidize HIS risk.  There is NO CHANCE he would be turned away at a hospital, like fire companies used to let houses burn down if they wre signed up with a competing company.  We ARE floating him a loan, because it is our tax dollars that bails out the hospitals bad debt pool.

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            Do we require auto insurance only of drivers that have accidnets?  Or of all drivers, good and bad, so the coverage is affordable?

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            BTW, Stomy – there IS a ‘risk analysis’ provision in the bill.  If Mr. Smug and Healthy prefers, he can place $10,000 on deposit with the Treasurer’s office and not buy a policy.  Hospital bills, if any, get taken from the $10,000.  Alternatively, he can continue to refuse to buy coverge, and his tax refunds will be intercepted until tey reach that $10,000 threshhold, and the money can be held for the same purpose – sort of an installment plan.  Eithr way, we are indemnified aginst his bad decisions.

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            BTW – did you know you can do the same thing with auto insurance?

            • Seems like there are some assumptions being made to support the argument one way or the other.

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              What are the details of the tax-funded ‘bad debt pool’ payout? 
              What’s the mechanism for dipping into it?  How does it compare with the costs of universal coverage?  I mean, let’s even assume we had to pick up that $7,000 bill, we would have still saved money overall by not paying for insurance that wasn’t needed.

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              Are hospitals being saddled with lots of small unpaid bills, or are the costs related to large bills which force an individual into bankruptcy?  How do the odds play out?  Obviously, the insurance companies are making money, so there must be some tipping point beyond which paying for health insurance favors the company more than the individual.

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              And is it true if you deposit money with the Treasurer you don’t need auto insurance?  I don’t think that’s a good idea.  $10K is going to be chump change if you get into a serious accident.  Afterall, we don’t buy insurance for the stuff we can affford.  We buy it for the disasters.

          • Wow!  There was a shift from the left to the right so fast it was bright red!  There’s hope for you yet. Whip-slash! Quick, fetch me a lawyer.

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            Mass mandates seat belts, minimum house/fire insurance, auto insurance, auto inspection, building inspection, environmental inspection prior to building, helmets for cyclists, blood tests before marriage, minimum wage…

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            There’s absolutely never an appropriate time for my government to require me to enter a contract with a private corporation.  Never.

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          • Minimum wage requires you to accept nothing less when you contract with a private corporation.
          • Statutes require you to buy auto insurance from a private corporation
          • Statutes require a specific amount of fire insurance on your home, from a private corporation
          • Title V requires you to pay for an inspection by a licensed, private party prior to selling your home

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            But now you draw a principled stand when it comes to health insurance!

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            Welcome to the dark side young Skywalker.  (No, that’s not a tear in my eye. Must be dust.)

            • is that none of those examples is a condition on your simply existing in this state, while the health ins mandate is.

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              Car ins – easy.  Don’t own a car.  Lots of folks don’t.  (Also, damage caused by a car tends to be large and inflicted on a single individual, so the nature of the harm is different, but that’s a separate discussion.)

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              Min wage – off point.  Lots of laws restrict the kinds of contracts that are legal.  Health ins mandate is a different issue.

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              Fire ins – really?  I thought that was just if you have a mortgage, and that the mortgage company required it.  I’m happy to be corrected.  Anyway, you can always rent.

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              Title V – again, off point.  That’s not a requirement of living here, it’s a requirement with respect to your voluntary decision to enter a particular regulated transaction.

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              I maintain that stomv’s right (and that I’ve been right all along): the health ins mandate is unique, and a bad idea.

  3. Too bad these sorts of workshops weren’t held throughout the state before the legislation was crafted.  The more I review some of the stuff that gets passed, the more I wonder if they aren’t all asleep at the switch.

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    * How will the personal mandate to buy insurance affect young people who do not make a lot of money, and who are often saddled with enormous personal and student debt? Will we actively drive young folks out of the state?

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    I don’t think so.  Maybe over the state lines.  But if you’re young and not making a lot of money, you probably don’t have a lot to invest in relocation and a job search.  They’ll suck it up.

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    * What exactly are you getting for your money when you have to buy a supposedly affordable “insurance product”?  * Why is health care so bloody expensive, anyway?

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    I think that’s part of the problem. We haven’t see a real innovation towards a “budget” health insurance program.  We have that somewhat with plan options that offer a lower premium in exchange for higher out of pocket costs.  But the health care system as a whole doesn’t offer a low-cost version for low-risk individuals.  We’ve seen some — places like HealthStop where you can get just basic services.  I seem to recall using those services when I was uninsured, and the costs were reasonable. 

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    But for the most part, health care systems have all the bells and whistles, and that translates into higher costs.  It’s as if we are all flying first class.  I think it’s partly because of the liability/malpractice concerns.  Also, and this is just my impression not grounded in any data, I think as a society we rely on our health care system too much for our well-being.  We want to eat poorly, not exercise, and expect that we’ll still be healthy.

    • There is a huge amount of the health care law that has yet to be written. That’s what these workshops are all about.

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      I have heard that low-premium/high-deductible plans may be made available for young folks. We’ll see pretty soon.

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      I have to take issue with your implication that it’s a matter of personal habits, or that we use our health care system too much; it’s that the system itself doesn’t serve the purpose of health, so we are not encouraged by the system to use it the right way. Care providers are not rewarded for providing health, they’re rewarded for providing services.

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      So you get a piecemeal approach where literally and figuratively, the operation is a success but the patient dies.

      • I am going to have to get up speed on the status of legislation.  So, something was signed, but it’s not quite written?  I’m confused.  But I’ll catch up.  Certainly appreciate folks like yourself helping to fill in the gaps.  And I’ll be on the lookout for forums like the one you mentioned.  Was it sponsored by the legislature?

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        I’m also curious what thought has been given to linking cost to risk.  Auto insurance, life insurance, and others charge higher premiums for higher risks.  If I smoke, I pay a higher life insurance premium, for example.  Would the same hold true for health insurance.

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        You may have a point that we use our health care system the wrong way.  And I did read the post you linked to.  But, I’ve seen much more emphasis on “wellness” from Tufts and Fallon over the past five years.  Surely, they recognize prevention helps their bottom line.  But what they don’t do is charge people more for the medical equivalent of reckless driving.

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        I know that would be a slippery slope.  No one is compelled to be a bad driver, but with high medical needs, it’s sometimes luck of the draw (genetic disorders, etc.).  But, what about preventable diseases?  If the health insurance covers prevention and wellness programs, should they have some expectation that their customers get themselves as healthy as possible.  Maybe this would be more palatable as a “discounted” premium for non-smokers, physically fit, etc. individuals.

  4. Yes, a genetic disease or cancer will be a single big ticket – but the day-in, day-out expense is a MYRIAD of small charges.  The grill on the deck that gets knocked over, burning an arm.  The slip with the kitchen knife that needs three stiches.  The tumble in the bathroom with the broken ankle.  THESE are the free care abuses, and they are overwhelmingly among the young uninsureds.

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    It’s funny.  These kids won’t default on student loans becuase THAT will be intercepted from a tax refund, but free care?  Heck, who pays that? What am I supposed to DO, give up my cell phone and HBO?

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    As a sidebar, it has always mde me FUME that illegal immigrants, et al, are given all the blame for this when it’s snotty middle class kids who decline coverage because they are God’s gift to our economy.  Starbucks economy, maybe, but not much else.

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    If we can intercept for child support and student loans, why NOT for free care?  Why not pull the real estate, law or electricians license of anyone who owes free care?

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    DON’T GET ME STARTED!!!!

  5. How about a tax credit for those that have signed up for mandated insurance but have not used it during the year?

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    I don’t know the numbers, but if you don’t use it at all I think a tax credit is fair.

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