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.