June 22, 2005

THERE GOES THE FREE-STATER VOTE (via Rick Turley):

Romney eyes penalties for those lacking insurance (Scott S. Greenberger, June 22, 2005, Boston Globe)

Massachusetts residents who choose not to obtain health insurance would face tax penalties and even the garnishing of their wages under a proposal Governor Mitt Romney unveiled yesterday.

Romney says the ''individual mandate" he is proposing, part of his broader plan to cover the roughly 500,000 people who are uninsured, would not cost the state any money. But some healthcare specialists say the approach might cost hundreds of millions of dollars more than state taxpayers currently provide for government health coverage.

Romney's plan would require all residents in Massachusetts to have some form of health insurance or agree to pay their medical bills out of their own pockets. No other state has such a requirement, and if Romney manages to make it law, it would be a compelling accomplishment he could point to if he runs for president.

Currently, people without health insurance often go to hospitals and receive care they never pay for, because the hospital and the state pick up the tab. Under Romney's proposal, uninsured Massachusetts residents would be asked to enroll in a plan when they seek care.

If they refuse, the state could recoup the medical costs in several ways, Romney said yesterday: The state might cancel the personal tax exemption on their state income taxes, which is worth about $175. It could withhold some or all of their state income tax refund and deposit it in what Romney called a ''personal healthcare spending account." Or, it might take money out of the person's paycheck, as it does now to collect child support.

''No more 'free riding,' if you will, where an individual says: 'I'm not going to pay, even though I can afford it. I'm not going to get insurance, even though I can afford it. I'm instead going to just show up and make the taxpayers pay for me,' " Romney told reporters after a healthcare speech at the John F. Kennedy Library.


If you want care and can afford coverage, then pay for it.

Posted by Orrin Judd at June 22, 2005 11:08 PM
Comments

What about self-employed people who can only get insurance at extortionary levels (if at all) because of a pre-existing condition?

Posted by: Gideon at June 23, 2005 12:15 AM

What about young healthy people whose lifestyle doesn't include activities prone to injury? Requiring them to buy insurance they don't want or need is forcing them to subsidize others. I "self-insured" for years, and when I had a rare medical problem, I paid cash. Another feature of these plans which bloat the premiums is that they require payment for coverage that may be unwanted, especially quackery like chiropractic or psychiatric coverage. And I like the way he's going to turn emergency rooms and doctor's offices into surrogate tax collectors, too.

Thre may be problems that need solving, but this is the wrong way to do it. Which just goes to show that no GOP governor of a New England state stands a chance of running for President.

Posted by: Raoul Ortega at June 23, 2005 1:33 AM

Gideon and Raoul:
Medical savings accounts with high deductable major medical insurance would answer both of your concerns.

Posted by: David Rothman at June 23, 2005 6:53 AM

Raoul:

That's the most important time to be socking away medical dollars for later, via an HSA. But note that they only get hit under this program when they try to avoid paying.

Posted by: oj at June 23, 2005 7:34 AM

So Romney believes in increasing the cost of start-up enterprises in Massachusetts? He is proving to be another statist, big government clown, no different from his father. No wonder the place still has zero economic growth.

Posted by: bart at June 23, 2005 8:55 AM

bart:

Yes, it will need to be a nationwide mandate.

Posted by: oj at June 23, 2005 8:58 AM

And the Dow will sink to what? 5000? And NASDAQ what about 500?

If you increase the cost of start-up enterprises, you will reduce the number of start-up enterprises. Start-ups have been almost the entire basis of the relative economic boom of the last 2 decades that you trumpet at every oppoetunity. And you want to kill the goose that lays the golden egg.

Spoken like a true welfare recipient, excuse me, house-husband.

Posted by: bart at June 23, 2005 9:20 AM

Is there not an unnamed elephant in the room here? California apparently has a massive problem of ERs closing due to financial distress caused by treating the uninsured. Guess why...

Posted by: b at June 23, 2005 10:43 AM

David: even high-deductible major medical for young healthy people isn't cheap. I'm 28 and healthy, and my HSA plan with the highest allowable deductible is $200/month (premium only, not including HSA contribution). In the last year, I used approximately $500 worth of medical care, all of which came out of my HSA savings (and thus directly out of my pocket) because my deductible is $5K. That's $2400 I paid the insurance company, for which I received no direct benefit whatsoever, and I still had to save enough money on top of that to pay for my medical care. I've made the personal decision that the risks of being uninsured outweigh the costs of the premium, but I have a real problem with the state mandating that I do so.

As for the pre-existing condition problem, HSA-qualified policies don't do as much here as you think, either. I have a niece with a cleft palate, who will need a few more surgeries as she grows up. When my sister recently attempted to get a high-deductible policy, she was told that the insurance company wouldn't touch her, period, at any premium or deductible. I don't see how state-mandated coverage would fix that problem.

Don't get me wrong -- I think HSAs are great, and as a self-employed person, I'm very glad they're available. However, they're not a panacea to all health-insurance cost issues.

Posted by: Atlee Breland at June 23, 2005 12:51 PM

To qualify for an HSA you first have to have insurance. Chicken and egg.

I have diabetes type II, no symptoms if I take two pills a day ($100/mo). The lowest HDHP plan I can qualify for is $1100/mo with 20% average annual increases.

Much of that $1100 is for state-mandated psych and chiropractic coverage, state-mandated health fees, wasteful and fraudulent claims, and bureacratic overhead. I'd rather keep my money and write my doctor a check.

Posted by: Gideon at June 23, 2005 12:53 PM

Mismanagement

Posted by: oj at June 23, 2005 1:04 PM

bart:

It'll rise. All the HSA savings will fuelk even higher growth.

Posted by: oj at June 23, 2005 1:10 PM

A mandatory plan is a subsidy for mismanagement as it makes the market non-competitive, since all consumers must be in it. I haven't noticed that auto insurers and electric utilities are models of efficiency.

Posted by: bart at June 23, 2005 5:18 PM

Auto insurance is ridiculously cheap. No one mandates that you have electricity.

Posted by: oj at June 23, 2005 5:25 PM

Auto insurance is cheap? Tell that to about 3 million NJ voters.

You are free to turn off your electricity if you wish,I'll pass, but you must buy from the local regulated monopoly. That creates the inefficiency.

Posted by: bart at June 23, 2005 5:51 PM

Yes, so the point isn't mandates in either case, but inefficient markets. I'd tell you to move but they deserve you.

Posted by: oj at June 23, 2005 5:58 PM

The inefficient markets are the direct result of government mandate. Government-mandated health insurance will have the same effect of protecting inefficiencies through the regulatory process.

And I am moving to Florida in the late winter-early spring, where I will be, inter alia, saving a significant chunk of change on my car insurance, but will, in the short-term, have to pay for my own medical and dental.

Posted by: bart at June 23, 2005 6:19 PM

what regulation?

Posted by: oj at June 23, 2005 6:47 PM

Never heard of Insurance Commissions? I deal with them every day. Electric utilities deal with Public Utility Commissions, which are similar.

Posted by: bart at June 23, 2005 7:01 PM

Yes, there'll be a minimal federal requirement and wide latitude for the states. Those like NJ will typically use it ineptly.

Posted by: oj at June 23, 2005 7:09 PM

What State government wouldn't use it ineptly? One of the dirty secrets of American politics is that Federal officials are more competent than State officials who are themselves more competent than local officials. And given the abject level of incompetence of the average Federal bureaucrat, that is truly frightening.

Posted by: bart at June 24, 2005 9:42 AM

NH

Posted by: oj at June 24, 2005 9:47 AM
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