Wednesday, June 14, 2006
Universal Health Care, Massachusetts Style
A commentary in this morning’s newspaper (Los Angeles Times; June 14, 2006) concerned efforts by States to provide universal health care to their residents. Massachusetts has enacted a plan that requires every person to buy health insurance. A subsidy is provided for those who can’t afford the premiums. Vermont is in the process of enacting a similar system. Maine has had a system in place for a few years that is somewhat different from the one in Massachusetts. Maine’s plan hasn’t worked out as expected. Some California legislators have proposed a plan similar to the plan in Massachusetts.
The goals of the Massachusetts plan are that it:
The feature of requiring every individual to procure a health insurance policy is favored by conservative Republicans. The Republicans insist that any plan must involve an element of personal responsibility. They also liken the requirement of buying insurance to the requirement that every driver must have automobile liability insurance. I think this is a poor analogy. I will get to my reasons soon.
The feature of relieving hospitals of having to treat uninsured patients who avoid any medical care until their conditions become very serious appeals to hospital administrators. At present hospitals who continue to operate emergency rooms have to make up the cost of providing emergency service by charging other patients more than the cost of their care. Providing every person with health insurance will guarantee that persons will seek medical care early when treatment is not expensive instead of waiting until emergency treatment is needed. The net effect should reduce the total cost of providing health care, especially the cost of hospital treatment.
I applaud the goals of the Massachusetts plan and I hope the plan is a great success. I am doubtful about one feature. According to the plan, the insurance will be provided by several competing private insurance companies. In effect, every person in Massachusetts will be enrolled in a health maintenance organization run by a private insurer. There will be competition among these different HMO’s for profit, primarily. Providing good health care coverage will be a secondary consideration. The State of Massachusetts will have to supervise these HMO’s and permit lawsuits, if necessary, to force them to provide good care for their subscribers.
The analogy with automobile liability insurance that one is legally required to buy is a poor one. Liability insurance protects other drivers and other persons that we might injure as a result of accidents. My own experience with auto insurance is that the companies are slow to make payments. Naturally, they want to make sure that any payment is legally required.
The analogy with auto collision insurance is better. However, I am not legally obliged to carry collision insurance, which protects me in case my car is damaged for any reason.
Health insurance payments should be made promptly and with certainty. If I have a condition requiring immediate and expensive medical treatment to save my life, it does me no good for my insurance company to take its time to determine whether the treatment is really necessary and is covered by my policy. I may die in the meantime – in which case the company doesn’t have to pay.
I would feel better about a Massachusetts style plan if the insurance were provided by a single, non-profit organization. This organization should be motivated to provide the best health care so as to keep in check the tendency of health care costs to rise rapidly rather than to provide dividends to its stockholders. Conservatives may object to this idea because it wouldn’t provide a choice of plans. As in the case of auto collision insurance, different plans would involve different premiums and different deductibles. I am sure that this kind of choice could be provided by a single insuring entity.
The goals of the Massachusetts plan are that it:
- will assure that everyone has health insurance;
- will reduce the load on emergency rooms in hospitals who are overloaded with uninsured patients;
- will encourage health care providers to reduce costs;
- will provide adequate and affordable health care for all residents.
The feature of requiring every individual to procure a health insurance policy is favored by conservative Republicans. The Republicans insist that any plan must involve an element of personal responsibility. They also liken the requirement of buying insurance to the requirement that every driver must have automobile liability insurance. I think this is a poor analogy. I will get to my reasons soon.
The feature of relieving hospitals of having to treat uninsured patients who avoid any medical care until their conditions become very serious appeals to hospital administrators. At present hospitals who continue to operate emergency rooms have to make up the cost of providing emergency service by charging other patients more than the cost of their care. Providing every person with health insurance will guarantee that persons will seek medical care early when treatment is not expensive instead of waiting until emergency treatment is needed. The net effect should reduce the total cost of providing health care, especially the cost of hospital treatment.
I applaud the goals of the Massachusetts plan and I hope the plan is a great success. I am doubtful about one feature. According to the plan, the insurance will be provided by several competing private insurance companies. In effect, every person in Massachusetts will be enrolled in a health maintenance organization run by a private insurer. There will be competition among these different HMO’s for profit, primarily. Providing good health care coverage will be a secondary consideration. The State of Massachusetts will have to supervise these HMO’s and permit lawsuits, if necessary, to force them to provide good care for their subscribers.
The analogy with automobile liability insurance that one is legally required to buy is a poor one. Liability insurance protects other drivers and other persons that we might injure as a result of accidents. My own experience with auto insurance is that the companies are slow to make payments. Naturally, they want to make sure that any payment is legally required.
The analogy with auto collision insurance is better. However, I am not legally obliged to carry collision insurance, which protects me in case my car is damaged for any reason.
Health insurance payments should be made promptly and with certainty. If I have a condition requiring immediate and expensive medical treatment to save my life, it does me no good for my insurance company to take its time to determine whether the treatment is really necessary and is covered by my policy. I may die in the meantime – in which case the company doesn’t have to pay.
I would feel better about a Massachusetts style plan if the insurance were provided by a single, non-profit organization. This organization should be motivated to provide the best health care so as to keep in check the tendency of health care costs to rise rapidly rather than to provide dividends to its stockholders. Conservatives may object to this idea because it wouldn’t provide a choice of plans. As in the case of auto collision insurance, different plans would involve different premiums and different deductibles. I am sure that this kind of choice could be provided by a single insuring entity.
