Massachusetts Moves Toward Mandatory Insurance
Health care reform is back on the U.S. agenda. On the national level, it's all talk. But things are already happening in some states.
No state is farther along than Massachusetts, which passed a landmark health reform law last year — with bipartisan support. If health reform succeeds here, it could be a national model.
All state citizens are being told they must buy health insurance. If they do, everybody will get the care they need, and the cost will be spread across a wider base
The new law's implications are beginning to sink in, as people across the state face a July 1 deadline to purchase some form of coverage.
Paul Lovegreen runs the popular Tunnel City Coffee Shop in Williamstown, Mass., a picture-book community nestled up against the Vermont border. His coffee is roasted on the premises. The cookies and cakes are baked here. And Lovegreen insists on just the right consistency of foam for each cup of cappuccino.
Lovegreen makes his living cup by cup. He doesn't have a lot of margin for additional costs. Even so, the state is telling owners like Lovegreen, who employ more than 10 full-time workers, that they have to offer health insurance.
Lovegreen has reservations about the new law. He says it might make him think twice about hiring additional full-time workers. But when pressed, he says he's for it.
"I mean, any way that folks can get health insurance, it's a positive thing," he says.
Is Lovegreen's support mainly a philosophical question or a business question? "I think it's a little bit of both," he says, "but I think it's more a business question."
That's understandable. After all, if employers don't start offering coverage by July 1 — and paying at least one-third of the premium — they'll have to pay the state a penalty for each full-time employee.
"As a small business owner, if I was going to get a penalty of $300 per employee every year," Lovegreen says, "I couldn't do it."
And the philosophical aspect? "I really think people need to be insured," he says.
Not all business owners are so positive. Some have threatened to move to New Hampshire. But so far, the new law hasn't caused business owners to rebel — unlike the last time Massachusetts pushed health insurance for all, back in the late 1980s.
Largely that's because, this time, most of the onus falls on individuals. The law requires every citizen to buy some coverage beginning July 1. Those who don't will lose their personal exemption when they file their income tax returns next year — a penalty worth about $200.
That's not the end of it. By January 2009, Massachusetts wants everybody to have meaningful insurance, with preventive care, necessary prescriptions and protection against catastrophic bills. No other state has tried to legislate that.
Across town from the Tunnel City Coffee Shop, Scott Beverly of Flamingo Motors is taking apart the front end of a Land Rover. Its owner will pay $600 for the brake job. But that doesn't mean Beverly — co-owner of the three-man repair shop — can afford regular medical care.
During a break, Beverly says he and his co-owner, Kevin Leonard, sometimes compare their repair business to health care.
"If you sat down and figured out what the doctors or any of the health care providers are charging per hour, it would really kind of freak you out, compared to what a normal automotive garage gets an hour," he says. "It's $75 for a 15-minute consultation."
Car mechanics, he says, get $60 an hour.
Beverly, 35, hasn't had health insurance for years.
"I haven't really gone for any checkups or anything because I can't afford it," he says. "So if anything major pops up, I just go to the emergency room and then just pay for it out of pocket. Unfortunately, I've got a good example. Six months ago I had a piece of metal behind my safety glasses and I had to go get that removed. That was $950, just to get a little sliver of metal out of my eye. Everything turned out fine but ... I paid it off with what I could monthly."
Beverly has mixed feelings about the new Massachusetts law.
"I think it's a good idea," he says. "But I don't think it's going to be really affordable for a lot of people."
Under the Massachusetts law, the state subsidizes coverage for low-income people — those making less than 300 percent of the federal poverty level. That's about $30,000 for an individual and $61,000 for a family of four. But Beverly makes about $45,000 a year. So he doesn't qualify for subsidized coverage.
And he's not happy the state's telling him he has to buy it on his own.
"I don't believe that's right," Beverly says. "I don't believe they should be able to force you to do that. It should be your choice if you want health insurance or not. I don't think anybody should be penalized as far as health insurance goes."
State health officials are worried about people like Beverly. They say the worst thing that could happen is a citizen revolt.
To head that off, Massachusetts will exempt some people from the requirement. But they can't go too far. Insurance works on the idea that everybody participates, healthy or sick. If too many people aren't paying premiums, the cost goes up for those who do. So the state knows it can't require people to buy something if they don't consider it affordable.
Meanwhile, the state has negotiated with private insurers to develop a menu of new health plans. They've created new options for individuals and self-employed people, who have been priced out of the market before now.
For a 35-year-old man in western Massachusetts, the monthly premium for one of these new plans will be around $150 to $200.
Beverly is thinking about whether he can afford that.
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