THE LAW OF UNINTENDED CONSEQUENCES. Matt makes a good point about the way that health insurance mandates are designed to get around the problem of healthy individuals opting out of insurance pools, but speculates that mandates will only result in the creation of targetted new private plans for low-risk individuals, and that the insurers will still game the market. Fortunately for us, there’s already some evidence coming out of the one-year review of Massachusetts’ mandatory health insurance experiment, which shows that the problem of cool-branded private insurance plans that provide minimal coverage to healthy individuals is not yet much of an issue. On the other hand, a new state program for young adults — the largest percent of the uninsured in Mass. — not covered by employers that was developed to help them comply with the new mandate law has recently been reported to not adequately cover the seriously ill.
Additionally, the health insurance mandate has, thus far, resulted in a high concentration of old and sick people taking advantage of expanded government insurance programs, rather than a significant broadening of the risk pool for those expanded programs. According to an April Boston Globe report:
More than 110,000 people — one-fifth to one-quarter of the state’s uninsured — have been given free or heavily subsidized coverage in the past year. …
The biggest strides so far have been in providing free coverage for the uninsured with low incomes. Nearly half of that group has been signed up for the state Medicaid program or for new fully subsidized plans that offer some of the most comprehensive benefits in the nation. Earlier this month, the state expanded subsidies to provide free insurance for tens of thousands more.
“The very poor are covered very well,” said Brother Jack Rathschmidt of Our Lady of Lourdes Catholic Church in Jamaica Plain, a leader of the Greater Boston Interfaith Organization, a coalition of 80 congregations….
So far, most of those enrolling in partially subsidized programs are older and sicker. Without the younger, healthier people, costs will rise rapidly and the plans could quickly become unaffordable for everyone. (emphasis added)
A major expansion of government insurance for the oldest and sickest without a major change in the risk pool being covered statewide was not the goal of mandatory health insurance. Obviously, it is too early to draw any firm conclusions about the Massachusetts experiment, but it’s still worth looking very closely at their developing experience with trying to implement a mandate, especially after the fines for failing to buy insurance start kicking in this summer. There is a lot to recommend mandates in theory, but it’s the implementation that will tell us whether or not such an approach is something Democrats ought to uniformly push to replicate nationwide.
–Garance Franke-Ruta
