Sunday, May 07, 2006

The Devil in the Details

I'm not a policy wonk, by any stretch of the imagination, and certainly lay no claim to special insight into the ins and outs of Gov. Mitt Romney's health coverage plan for Massachusetts. However, I have followed its development with great interest --- mainly because it, at least initially, seemed to place what I would consider proper emphasis on individual responsibility.

Unfortunately, it appears that there are some serious flaws with the plan that make it something I could not support. There is a nice, succinct summary of Romneycare's Fine Print in Friday's Wall Street Journal by Betsy McCaughey (type "Romneycare" in the search box and follow the link) that points out a few major flaws, including: (emphasis is mine)

...individuals purchasing their own insurance must buy HMO policies. Preferred provider plans (PPOs) -- which give you more ability to choose your own doctors and treatments -- are not allowed (Section 65). (Why?)

...employers with more than 10 full-time workers to must provide all of them (and their families) with health insurance or opt out of that requirement by paying a $295 annual tax per worker into a state fund..... the $295 penalty is small potatoes compared with the other obligations in the law. Say, for example, you open a restaurant and don't provide health coverage. If the chef's spouse or child is rushed to the hospital and can't pay because they don't have insurance, you -- the employer -- are responsible for up to 100% of the cost of that medical care. There is no cap on your obligation. Once the costs reach $50,000, the state will start billing you and fine you $5,000 a week for every week you are late in filling out the paperwork on your uncovered employees (Section 44). These provisions are onerous enough to motivate the owners of small businesses to limit their full-time workforce to 10 people, or even to lay employees off.

Union shops are exempt (Section 32). (Gee, why in the world would that be, in Massachusetts of all places? Hmm?!)

People should be allowed to buy basic, high deductible insurance without costly extras (something I was unable to do when buying health insurance). The new Massachusetts law allows only people under age 27 to buy such policies (Section 90).

If the goal of public health care policy in this instance is to ensure that every citizen of Mass. is covered by insurance, it would seem to me to be far better to have [1] a level playing field for all employers, unionized or not; [2] the ability to purchase "no frills" health insurance that does not include BS like chiropractic care, aromatherapy, acupuncture, etc; [3] more, rather than less, choice, so that people can pick and choose between PPO, HMO, and "traditional" plans, just as they choose between grocery stores; and [4] a plan that encourages the individual to purchase coverage, rather than requiring it to be provided by employers.

I hope that Congress will eventually adopt a sweeping change in the way that health insurance plans are regulated --- something along the lines that allowed the state of Delaware to become a banking powerhouse several years ago. If for example I live in Minnesota, but prefer a health care plan from Arizona, which might allow health insurance coverage without the expense of covering chiropractic care, massage therapy, etc., then let me buy it! With over-regulation on the part of state insurance boards, and a history of employers being nearly the sole providers of health insurance, there has been a vacuum of true market competition that would eventually keep insurance costs, and health care costs in general, down (IMHO).