Senator Ted Kennedy, Governor Mitt Romney, the medical establishment of Massachusetts and the state’s consumer advocacy groups could hardly resist congratulating themselves on passing a new health insurance law this past spring–a so-called individual mandate requiring the uninsured to buy coverage from private carriers under penalty of paying higher income taxes if they don’t. The media called the law a model for states to replicate and praised such diverse groups for coming together to solve a seemingly intractable problem. A headline in the New York Times proclaimed, A Health Fix That Is Not A Fantasy.
A close look, however, reveals that the new law may well be a fantasy and a triumph for special interest politics after all. “It’s absolutely worthless,” says Dr. Marcia Angell, former editor in chief of The New England Journal of Medicine and author of The Truth About the Drug Companies. “There is no magic in Massachusetts.”
The law is yet another patchwork attempt to dodge the main obstacle to reform–a fundamental lack of agreement about equity in healthcare. Americans still don’t share equity as a universal value, so every endeavor to cover more people results in a complicated, contorted and underfinanced scheme. Massachusetts’s latest move is no exception. It pushes the country further away from national health insurance–with its essential ingredients of universal access, low administrative costs and limits on what medical providers can charge. Instead the law embodies much of the right’s approach to health reform, which continues to make the world safe for big insurance, big hospitals, and Big Pharma while palming off on the working poor the task of covering themselves. Indeed, a document distributed by Romney’s staff says the organizing principles of the new law are “a culture of insurance” and “personal responsibility”–exactly the opposite of what’s needed if the United States is ever to join the rest of the world in providing medical coverage for all its people.
The law, on a speedy track for implementation next March, leaves the current dysfunctional system intact, tinkering around the edges with insurance market reform. In Massachusetts that means, among other things, no new coverage mandates for two years, merging the individual and small-group markets to enlarge the risk pool and encouraging more policies with health savings accounts–not what people need for really good coverage. The core of American health insurance–the principle of letting private carriers select those they will insure–is firmly in place. Advocacy groups signed on believing that more people would be covered, that the state would make sure insurance was affordable and that compromise would move the debate forward.
Hospitals and employers emerged in fine shape too. Hospitals will receive about $500 million in higher Medicaid payments and a new revenue stream–in effect, they will be freed from the burden of offering charity care to the poor, who will now have insurance to pay their bills. Employers escaped without swallowing an employer mandate; that is, a requirement to cover all their workers. Those with eleven or more employees who fail to offer insurance will be assessed $295 per worker per year–a pittance compared with what they would have had to pay for real insurance, estimated by Hewitt Associates, a benefits consulting firm, to be about $9,000 per worker in 2006. For employers, the puny assessment was a far better deal than a real mandate, which had been headed for a ballot initiative this fall.