Mass. Health Care Review: Premiums to Rise 10% in 2010 with Pre-Existing Conditions subject to waiting period – U.S. Congress Adopts Mass. Model

Nancy Pelosi - Taking a Page from the Massachusetts Health Care Model? image cinisworld

Massachusettsresidents who hold private insurance plans are bracing for a 10% increase in the cost of their premiums in 2010. Blue Cross/Blue Shield, the Commonwealth’s largest insurer, has set premium increases for individuals at 10 to 11% while those who are self-employed, can anticipate a higher increase. This can mean up to a $40 per month drain on families who are already burdened with risings costs to do the rise in Massachusetts taxes imposed this year in order to cover the Commonwealth’s deficit. Subsidies for the Massachusetts Health Insurance model, remain one of the Commonwealth’s largest expenditures, and with an ever decreasing tax base, one can anticipate yet another round in taxes in 2010 to help foot the bill.

What about pre-existing conditions? Under Massachusetts laws, Pre-exiting conditions are not excluded, rather subject to a “waiting period” of up to six months.

Fees versus taxes, waiting periods versus exclusions; it’s all about parsing a phrase.

Those who live in the Commonwealth and are not covered under the mandatory health insurance laws, face paying a “fee” every year to the Massachusetts Division of Insurance. Although Massachusetts boasts the highest rate of insured’s in the nation, individuals and families who cannot afford the premiums, yet earn too much to qualify for subsidies are met with an additional tax burden.
Meanwhile, the few insurance carriers that are allowed to do business in the State, point to the 26 State mandated benefits they must cover as part of the reason for the increase.

The Health Care Reform Bill that Speaker Nancy Pelosi is blindly pushing through Congress, includes an interestingly similar feature to the Massachusetts model: under the proposed plan, those who are subject to pre-existing condition clause, will be subject to a “waiting period” of up to six months, before “Congress-Care” kicks in. Meanwhile, private insurance companies will be forced to pay into an ever increasing “risk pool” – driving up premiums for those who still have private insurance plans.

Although the Congressional version of Health Care Reform, has some level of approval from only 42% of the nations populace Ms. Pelosi’s’ intends to push the bill to a vote, despite an obvious message sent to those who would consider adding additional economic burdens to the nation this past Tuesday. Statewide wins for Conservatives in both Virginia and New Jersey, have been dismissed by the Speaker.

What is most startling is that the Speaker, and those Representatives in Congress who reside in the Commonwealth of Massachusetts, surely must have access to the data, yet they are willing to foist this flawed program on the rest of the nation. A common sense solution would be to allow for competition in the state (proposed by the House Republican’s), allowing only those benefits that relate to preventative care to be mandated, allowing insurers to offer plans that provide those “high price tag” benefits currently offered under the Massachusetts model (infertility treatments for example), at a higher rate, reducing the risks assessed across the board to consumers. To use the Massachusetts Model for the Nation is, in a word, economic suicide, which does little to aid those who are caught with a debilitating illness in a six month “waiting period”, and raises both premiums and taxes on those who are still employed.

Congress - Fees Proposed for Those Who Do Not Carry Health Insurance - Welcome to Massachusetts Style Health Care Reform

One of the latest propositionson Health Care Reform to come out of the U.S. Congress is a fine for those who fail to comply with Government Mandated Health Insurance coverage. Max Baucus (D-MT), working with the so-called bi-partisan “Gang of Six” to form a bi-partisan compromise on Health Care Reform, came up with a proposal that mirrors one currently in place in Massachusetts: (From AP News:)

"Just as auto coverage is now mandatory in most states, Baucus would require that all Americans get health insurance once the system is overhauled. Penalties for failing to get insurance would start at $750 a year for individuals and $1,500 for families. Households making more than three times the federal poverty level - about $66,000 for a family of four - would face the maximum fines. For families, it would be $3,800, and for individuals, $950."

Currently, Massachusetts’ version of Universal Health Care, which makes up the majority of the Commonwealth’s budget and is repeatedly driving the State into the Red (25% tax increase included), includes a “fee” assessed for those who do not carry some form of coverage under the Commonwealth’s guidelines. These “fees” are paid directly to the Massachusetts Department of Revenue (i.e. a tax). Those who fail to pay the “fees” are assessed a penalty on their income tax, which can include garnishment of wages. In addition, citizens of the Commonwealth, their Employers and insurance companies are subject to filing additional forms (bureaucracy in action), with the State – proof of insurance must be attached to one’s tax returns – proof of compliance with a State Mandated program. One must understand that anytime additional forms are required, be it for a health care provider, an insurer or an employer, costs are increased and those costs are passed onto the consumer. Additionally, government mandated benefits (such as coverage for Transgender Surgery and Infertility Benefits – high price tag items – there are 26 State Mandated Benefits, only some of which appear to be non-elective procedures in the real world (elective procedures – those that are not necessary to sustain life or prevent a serious illness) - further drive up the cost of health-care.

Should the Federal Government’s plan come close to what Massachusetts has in place, expect an increase in premiums, an increase in forms, and an increase in intrusion from the Internal Revenue Service, specifically if one cannot afford to carry any one of the versions offered by the particular state in which one resides.

The Massachusetts model could work, without breaking the bank and driving up the costs for consumers if the following we’re implemented: mandatory benefits reviewed to include only those wellness benefits and certain tests (mammograms, etc.) that are proven to save lives, and reduce the cost of healthcare. Allow citizens to purchase coverage across state-lines, which would not only increase the competitive pool, but spread the risks incurred by insurers, thereby reducing costs. Riders could be attached (at an additional cost) to plans, allowing individuals to cherry-pick high priced item coverage. Finally, allow for catastrophic coverage only; a plan that would allow participants to pay a high, yet affordable, out-of-pocket deductible (routine wellness benefits would not be covered – these often cost less annualized than the premium) providing hospitalization and surgical benefits and treatments.

Massachusetts has a public option in place, it would behoove those lawmakers who are so keen on pushing through legislation to investigate the Commonwealth’s programs and its impact on the State’s economy and specifically the impact on the middle class (increased premiums, increased taxes, increased “fees”) prior to writing any legislation that includes a hint of a public option.
References:

Massachusetts Sales Tax
Penalities for Uninsured’s to Rise in 2009
Feeding the Beast, Massachusetts Health Reform Act