Guinea pigs

By DAVID S. BERNSTEIN  |  October 31, 2007

If Massachusetts finds that it takes a huge, expensive, time-consuming process to enroll this demographic and to keep them in the system, the individual mandate won’t look very practical, and will likely be avoided in future plans.

More important to local citizens, if the new system doesn’t function as intended, the state will be in a real jam: among other problems, Massachusetts could potentially lose hundreds of millions of dollars in federal grants that are predicated on increased enrollment. “If we fail in this, we are in a deep, deep hole as a Commonwealth,” says McDonough. “The price of failure is significantly higher than the price of success.”

Pay to play
Getting everyone in Massachusetts insured, experts say, is critical for three reasons. First, it’s best for the health of individuals. Second, it helps spread out the cost of the system among all residents, not just the ones who use health care most often. Third, when the uninsured do need medical care, they are often unable to pay, leaving providers and the state’s Uncompensated Care Pool to pick up the tab — a cost that the new system, by insuring everyone, should dramatically reduce.

The new Massachusetts plan tries to encourage more employers to offer health insurance to their workers, by decreasing costs and by imposing fees on those that do not. Meanwhile, the plan will make it easier and more affordable for individuals to get insurance on their own. To do that, the Commonwealth Health Insurance Connector, a special state-run body created to link people to plans, works out the packages and costs of coverage, as well as the subsidies available to lower-income residents.

To help the “young and healthy” take part, the Commonwealth Connector is offering four tiers of insurance plans, including a low-cost, low-benefit “Young Adults Plan” for those aged 19 to 26. The cheaper plans have higher deductibles and co-payments, particularly for prescription drugs and outpatient treatment. Some critics of this multi-tier approach, including Massachusetts senator John Kerry, deride this as dumbing down insurance, arguing that universal coverage is meaningless if the insured can’t afford their share of the cost of treatment under these minimal-coverage plans. Others, including Trueman, argue that healthy 25 year olds shouldn’t be forced to buy expensive, high-end “BMW” insurance when they only want “a used Kia,” as Trueman puts it. “That’s okay — it gets them where they’re going.”

But even at Kia prices, are the state’s young adults signing up for the low-budget insurance? It’s hard to say, because so far, with the data spread among many points, nobody yet knows for certain who is and who isn’t participating, and why. Officials estimate that 200,000 previously uninsured people have bought health insurance in Massachusetts in the past 16 months. That leaves somewhere between 150,000 and 300,000 still to sign up, depending on whose estimates you believe.

Some theorize that the ones who have signed up are lower-income families taking advantage of new subsidies and low-cost options — meaning that the remaining uninsured might be the higher-income young adults who may prove far more difficult to convince.

To prompt remaining laggards into action, the state will begin imposing penalties, through the state tax system, beginning January 1. That fine will start at a couple hundred dollars for 2007, but for 2008 will likely be equal to half of the cost of the cheapest available insurance plan — as much as $1500.

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