Mandatory Health Insurance: Wrong for Massachusetts, Wrong for America

"President-elect Obama has pledged to make "universal health care"
one of the highest priorities of his new administration.

Senator Max Baucus, a powerful Democrat, has just proposed adopting
the failed Massachusetts plan on a national scale.

Even more ominously, insurance companies have agreed to support this
idea, saying that they'll accept new government regulations in
exchange for the federal government requiring all citizens to
purchase health insurance:

http://www.denverpost.com/headlines/ci_11022281

The below article examines how the mandatory health insurance program
has fared in MA- and should make us think hard about the consequences
of expanding it to the national level."

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Mandatory Health Insurance: Wrong for Massachusetts, Wrong for America
by Paul Hsieh, MD

The Plan and Its Popularity
In April 2006, Massachusetts became the first state in the nation to
require that all of its residents purchase health insurance. This
mandatory insurance was the centerpiece of a "universal" health care
law hailed by analysts as an "innovative bipartisan plan."1

Republican governor (and former presidential candidate) Mitt Romney
proclaimed that "every uninsured citizen in Massachusetts will soon
have affordable health insurance," that costs would be reduced
through "market reforms" encouraging "personal responsibility," and
that the plan would require "no new taxes . . . and no government
takeover."2

The plan had support from organizations and individuals across the
political spectrum, including the conservative Heritage Foundation,
the liberal group Health Care for All, and Democratic Senator Ted
Kennedy.3

The Massachusetts plan was, in part, a response to today's health
care costs, which are rising twice as fast as inflation, making
insurance increasingly unaffordable for many employers and
individuals.4 Currently, approximately 47 million Americans have no
health insurance.5

In an effort to solve the problem in their corner of the country,
Governor Romney and the Massachusetts state legislature enacted this
plan with the twin goals of reducing the cost of health care and
guaranteeing coverage for all Massachusetts residents.

The Massachusetts plan consisted of the following major elements: The
state would establish a quasi-governmental authority known as the
Commonwealth Health Insurance Connector (or "Connector") to serve as
a clearinghouse through which individuals would be able to purchase
state-approved insurance plans.

Every resident would be required to purchase a health insurance plan,
either from a private insurer or though the Connector, with stiff
financial penalties for those who failed to comply.6

Residents who could not afford insurance would have their expenses
subsidized by the state in part or in full, depending on their
income. Employers with more than ten employees would be required to
provide health insurance for their workers or pay a special fee to
subsidize coverage for low-income individuals.7

In theory, the plan would lower individual patients' insurance costs
by enlarging the pool of insured patients. In particular, younger,
healthier patients (who often choose not to purchase insurance) would
be required to do so, thus paying a portion of the health costs of
the larger population.8

The plan was attractive to liberals and conservatives alike.

Liberals embraced it because it supposedly promised "universal
coverage" without requiring them to support politically risky
Canadian-style "single-payer" socialized medicine.9

Conservatives embraced it because it supposedly encouraged "personal
responsibility" while preserving a "market framework" for health
insurance.10

For these reasons, mandatory health insurance has become popular with
politicians in both major political parties, including Republican
California governor Arnold Schwarzenegger and former Democratic
presidential candidates Hillary Clinton and John Edwards.11

The idea has been endorsed by the National Small Business Association
and the National Business Group on Health (an association of large
businesses).12 Several states besides Massachusetts and California—
including New Jersey, Ohio, Rhode Island, Pennsylvania, Illinois, and
Colorado—have considered or are considering some version of mandatory
health insurance.13

Yet two years after its inception, the Massachusetts plan has failed
to achieve either of its goals. The plan did not lower health care
costs, nor did it achieve universal coverage.

Thus, given the growing popularity of mandatory health insurance,
Americans would do well to take a close look at the results of the
Massachusetts plan—and, more importantly, at the reasons for those
results.

Let us look first at the results....

Full article:

http://www.theobjectivestandard.com/issues/2008-fall/mandatory-health-
insurance.asp