Thursday, August 16, 2007

Are we even talking about the same Massachussetts?

Michael Tanner of CATO is waxing smug because the Massachusetts plan for universal health care is facing some trouble as deadlines approach. The uninsured in Massachusetts have four months to buy insurance, or they'll face a tax penalty. But as things stand now, "of 170,000 people who are uninsured but have incomes too high for subsidies, only 17,500 have complied with the mandate so far." Tanner claims that CATO called this one in the air - the mandate was unenforceable and they knew it. To bolster the tanks "I-told-you-so" cred, he directs us to his earlier writing on the subject, noting,

"Someone should have pointed out that the Massachusetts mandate is probably unenforceable and almost certainly not going to achieve universal coverage. Oh, that’s right, we did."

Funny thing is, his earlier piece says absolutely nothing about enforceability. In fact, the extensive hand-wringing over allegedly severe restrictions on consumer and employer choice seem to belabor the worry that the Bay State Politburo might enforce it's social experiment all too well (ominous music, lightning).

Interestingly enough, the criticisms that CATO did make turn out to be pretty far off the mark when we consider what's actually going on in Massachusetts.

Criticism 1: " The individual mandate opens the door to widespread regulation of the health care industry and political interference in personal health care decisions."

Now I could always be wrong, but I am almost positive that was the point of passing a regulation on the health care industry. Y'know? So, conceded, I guess.

Criticism 2: " The act's subsidies are poorly targeted and overly generous."

Actually, no. The MSNBC article that Tanner links to (see "trouble", above) reports:

About 160,000 uninsured people in the state have incomes that are too high to qualify for subsidized health insurance — but too low to afford the lowest-cost unsubsidized plans.

The Massachusetts plan is fading in the stretch because the subsidies aren't extended generously enough. For too many people, the mandate has become a choice between paying insurance premiums or paying for their housing or groceries. It takes a willful ignorance of reality to make Tanner's claim. I don't know how to make this any clearer: people are not refusing to enroll because the market is over-regulated. They are refusing to enroll because the current market is cost prohibitive for the working poor of Massachusetts.

Criticism 3: "The Massachusetts Health Care Connector, which restructures the individual and small business insurance markets, is a form of managed competition that has the potential to severely limit consumer choice."

Again, point ceded. Consumer choice does get sidelined by a mandate to purchase insurance. But does this have anything to do with the failure of each Massachusetts citizen to enroll? The market restructuring should be a boon to providers - faced with the threat of fines (a clumsy method of implementation in my opinion), employers and individual buyers have an extra incentive to spend money on premiums that they might have chosen to hold onto before.

Criticism 4: "The act imposes new burdens on business and creates a host of new government bureaucracies to manage the health care system."

I did read a piece talking about some delays in processing caused by a deluge of applicants as the deadline nears... somehow I doubt that's what Tanner was getting at. If you read the MSNBC article, some small business owners are miffed at having to take on the costs of insurance. One restaurateur is perfectly livid. But no examples are given of any businesses actually tipping into bankruptcy from the requirement, while we know that hundreds of thousands of Americans declare bankruptcy annually from insurmountable medical fees. That observed, I'll ad that I'm currently working for a restaurateur who gets ticked when I remind him that he has to pay me the minimum wage. So my sympathies for small businesses are diluted. Small -time capitalists do have a lot of troubles to face, but the idea that they are totally incapable of cutting profits to care for their employees is a myth.

In any event, taking all four criticisms into account reveals that contrary to the CATO blog's current swagger, Tanner's actual predictions are either ideologically driven truisms that are immaterial to the current dilemma faced by Massachusetts - or - in one case, an ideologically driven policy criticism that succeeds in nailing the exact opposite of what is actually going on.

I'll note in closing that I am not a devotee of Plan Massachusetts. I do not think it goes far enough. And I think it leaves an awful lot of power and economic privilege to insurance companies, most egregious being the lack of a cap on annual medical expenses as a proportion of income. Not to mention, every one of the issues at hand - from burdening businesses to non-compliance due to a cost-prohibitive market - are issues that would not exist in a nationalized system funded by a progressive tax scheme. In theory, I'm open to alternatives to a system like Canada's, but I'm seeing few practical reasons to maintain that position as of late. But I'll stick to my guns: I just want to see every person have access to affordable health care. So ideological implications aside, I do hope the Massachusetts plan succeeds. Let the CATO crowd preemptively notch their belts based on who-knows-which facts - the reality based community will keep watching and hope for the best.

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