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A MANDATE'S FIRST YEAR. Ezra points out something J. Goodrich also noted in the comments on my item, and which I should have pointed out myself, as well. The disproportionate influx of sick and elderly into an expanded government insurance system under a mandate law during its pre-penalty period is to be expected. And yet I still think it will be worth watching the Mass. experience as this debate goes forward, and closely monitoring how people react to penalties for remaining uninsured when the days of reckoning finally arrive. The costs of the penalties I've read about under the Mass. law are lower than the costs of the stand-alone health insurance premiums I've heard about, and may still make it cheaper for certain healthy people to stay uninsured than to buy insurance. Indeed, the affordability problem in Massachusetts has been so acute that in April the state had to start exempting people from the mandate:
state officials decided to exempt 20 percent of the state's uninsured population of 328,000 adults from paying penalties if they don't purchase health insurance after it realized they were too poor to afford any coverage.Additionally, a lot of people in the state are going to struggle as they try to comply with the law:
Many groups had weighed in on what the state's premiums should be, including the Greater Boston Interfaith Organization. In its study of affordability, the group conducted workshops that required participants to fill out detailed monthly budgets to determine how much discretionary income people had left after paying basic monthly bills.What happens under such a scenario is either you have to abandon the universality of your mandate, as Massachusetts has already done, or markedly expand government subsidies and insurance programs to make it possible. According to The Boston Globe, more exemptions may yet be made, since the law has a hardship waiver proviso for those who can't find insurance that's affordable:According to a statement on its Web site, the group found that 46.1 percent of those earning up to 300 percent of the Federal Poverty Line would have to go into debt to afford even subsidized health insurance. And 39 percent of those earning from 300 percent to 500 percent of the poverty line could not afford premiums of $380 per month.
A person would be automatically exempted for example, if he or she earned about $33,000 and can’t find coverage for less than $150 a month. A family earning would be exempt, for example, if it earned up to $70,000 and could not find insurance premiums for $320 or less.A national mandate would, presumably, include stronger efforts to address the affordability question up front.
--Garance Franke-Ruta
