Managed Care - May 2008 - (Page 47) also functions as a consortium through which How the Massachusetts mandate works individuals and small dults are required to buy insurance. If they haven’t been exempted, they businesses can pool their face a tax penalty that is administered by the Department of Revenue. resources to get the sort of Exemptions are based on affordability — if you are X years old and make Y purchasing advantage that dollars a year, you do not have to buy insurance if it costs more then Z dollars. big companies get. In 2007, if someone didn’t have insurance on Dec. 31 and was not exempted, That’s the way it’s suphe had to pay $219 more in taxes. For every month that residents don’t have posed to work. However, insurance in 2008, those not exempted face a penalty from DOR when they one need look no further file a 2009 tax return. Depending on how much they make, the penalty can than to Romney himself be as high as $912 a year. Here is a breakdown of 2008 penalties: to surmise that something Monthly Annual might be wrong. He ran Income penalty penalty for president and seems to be lobbying to run for vice Under $15,324 (150% of federal poverty level) No penalty president, but he doesn’t From $15,325 to $20,424 (150%–200% FPL) $17.50 $210 talk much about health From $20,425 to $25,536 (200%–250% FPL) $52.50 $630 Above 300% FPL and between ages 18 and 26 $56 $672 care reform these days. Above 300% FPL and age 27+ $76 $912 Michael D. Tanner SOURCE: Commonwealth Health Insurance Connector Authority does. He’s a senior fellow at the libertarian Cato Institute and has written extensively about RomneyBoston, was $335, and the policy carried a $5,000 Care in publications such as the Wall Street Journal, deductible with no drug coverage. The next month, Washington Post, and New York Times. The title of a range of products was available including one one of Tanner’s studies, “No Miracle in Massachufor $184 with drug coverage, and with ER and office setts,” underscores his conclusion. Mainly, Tanner visits covered before the deductible. The deductible objects to RomneyCare because: was only $2,000. So, literally, half the price and twice the benefits. We’ve done the renewals for next • It doesn’t offer true universal care. July. Those prices are only going up on average 5.1 • It has managed to browbeat health plans into percent, July 2008 over July 2007. So we’ve been acpaying doctors low rates while charging low tually able to sustain those rates.” premiums to members, lobbying successes That’s not what Tanner says. that probably can’t be repeated. “The problem is that if you look at who’s sign• It might create an “artificially increased” deing up under the mandate, there’s been adverse semand for health services. lection,” says Tanner. “Basically the young healthy • It has put a strain on primary care physicians people are saying, ‘Even with the penalty, I’m not thanks to the number of formerly uninsured going to sign up because the premiums are so high.’ people now heading to doctors’ offices. So you’re not substantially changing the insurance pool so far.” One significant flashpoint between Tanner, arguably RomneyCare’s biggest critic, and Kingsdale, No tradeoff? its biggest booster, is how successful the program Tanner contends that the idea originally was to has been in convincing so-called “young invincitake the uncompensated money that hospitals abbles” to buy insurance in the individual market, sorbed to care for the uninsured and use it to subthanks to a coverage mandate. sidize individuals. “It was supposed to be essentially “It worked out better than we hoped,” says Kingsa one-on-one tradeoff. The state would subsidize dale. “In June 2007, the month before we launched the individuals and there wouldn’t be any more the Connector’s 42 individual private health plan uninsured. Therefore the hospitals wouldn’t have products, the cost to the typical uninsured Massaany more uncompensated care costs.” chusetts person, who was a 37-year-old male in It hasn’t worked out that way, he says. The state A MAY 2008 / MANAGED CARE 47
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