A law that makes the sickness worse

February 1, 2008

Nancy Welch explains the consequences of a Massachusetts law that makes health insurance mandatory for all residents of the state.

MAKE PROOF of health insurance mandatory. That's the solution to the country's health care crisis offered up not only by Republican Mitt Romney--the former governor of Massachusetts and architect of a law requiring all state residents to obtain health insurance or face a steep penalty--but also by several leading Democratic presidential contenders.

But in January, more than 250 Massachusetts doctors issued an open letter warning against this "cure" that promotes the health--and wealth--of private insurers.

Signed into law by Romney in 2006, the Massachusetts mandate garnered broad support for its promise to expand Medicaid eligibility, provide subsidies to help individuals and families purchase private insurance, and establish a new state agency to work with private insurers to make affordable policies available.

Two years later, doctors are giving the law an "F" in just about every category:

Failure to reduce the numbers of uninsured. While 37 percent of the state's 657,000 uninsured residents gained coverage under the law, eight in 10 are among the very poor, who had been previously served by the state's free health care program. Now enrolled in a managed-care form of Medicaid, these patients face new co-payments for doctors' visits and prescriptions.

What else to read

Physicians for a National Health Program has a Web site that makes the case for a government-administered single-payer program and has information on single-payer legislation sponsored by Rep. John Conyers.

For a critique of the Massachusetts health care law, see "I Am Not a Health Reform," a New York Times op-ed article by PNHP cofounders David Himmelstein and Steffie Woolhandler. In "Obama-Clinton health debate ignores real issue," California Nurses Association Executive Director Rose Ann DeMoro examines the proposals of the Democratic presidential contenders.

The CNA Web site is filled with health care horror stories from both patients and providers, plus ideas of how to get involved in organizing for a change. Healthcare-Now posts a regularly updated calendar showing events around the issue of health care.

For a compact history of U.S. health care policy and the struggles for a national health program, from the progressive era to today, read One Nation, Uninsured: Why the U.S. Has No National Health Insurance, by Jill Quadagno.

Donald Barlett and James Steele's Critical Condition: How Health Care in America Became Big Business--and Bad Medicine is a fact-packed expose of the for-profit health care industry.

Marcia Angell, a former editor of the New England Journal of Medicine, takes on Big Pharma in The Truth About the Drug Companies: How They Deceive Us and What to Do About It.

Failure to make health care affordable. For those not eligible for Medicaid, even the flimsiest coverage remains out of reach. For instance, the cheapest policy available for a couple in their 50s costs $8,200 a year--and even that comes with a $2,000 per-person deductible and co-pays after that. Only 16 percent of people eligible for subsidies to purchase skimpy private insurance policies like this have been able to do so.

Failure to curb administrative waste. Money that used to go directly to patient care at the state's safety-net hospitals and clinics is now funneled through private insurers, with their profit-extracting administrative costs that run five times higher than the Medicare system and 11 times higher than Canada's single-payer system. Meanwhile, the "Connector"--the state agency set up to peddle private insurance plans--adds an additional 4.5 percent surcharge onto every policy it sells.

ACCORDING TO Dr. Rachel Nardin, a neurologist at Beth Israel Deaconess Medical Center, some patients who once received free care are nevertheless "proud to have insurance, even if the insurance is costing them more and not as good."

That's understandable given how the Massachusetts law stigmatizes the uninsured, suggesting that they must prodded with carrots and sticks into the insurance marketplace.

But that doesn't change the fundamental unfairness of the law, says Dr. David Himmelstein, who, like Nardin, is a member of Physicians for a National Health Program. In addition to diverting funds from safety-net care for the poor, the law seeks to punish many thousands more for failing to purchase plans "they have no hope of being able to afford," Himmelstein says.

Among the sticks facing Massachusetts residents who can't demonstrate proof of insurance on their 2008 tax return is a $200 fine. The fine would then jump to half the cost of the least expensive policy available to the individual--for a couple in their 50s, that would mean a minimum fine of $4,100.

"Whether the state will be able to pursue these punishments will depend on what kind of outrage there is," Nardin said. "But that's what's on the books, and it's regressive."

Meanwhile, the beneficiaries of the law are clear--the private insurance industry, for starters.

In their open letter, the doctors highlight Blue Cross, the state's largest insurance provider, which is raking in $1 million in profits every day and has rewarded its chairman with a $16.4 million retirement bonus on top of his $3 million annual salary.

In addition, the new law channels dollars into the coffers of Massachusetts' big teaching--and moneymaking--hospitals. While the Cambridge Health Alliance, which includes the state's only remaining public hospital, faces a $100 million deficit, Massachusetts General expects a $300 million surplus.

"To be fair, Mass General has made a big surplus for years," said Himmelstein, chief of Social and Community Medicine at Cambridge Health Alliance, "but they're boosted significantly by this law."

While the health care profiteers do well, the state faces a widening funding gap. Fines collected from employers who don't provide coverage for employees are running 80 percent below projections. The cost of subsidies even for the tiny percentage of low-wage workers able to purchase insurance ran $147 million over budget in 2007.

"Already," the doctors warn, "state officials speak of making up the shortfall by forcing patients to pay sharply higher co-pays and deductibles, and by slashing funds promised to safety net hospitals."

A single-payer program, say the doctors, is the only genuine solution--one that would save Massachusetts $9 billion every year by eliminating private insurance profits and bureaucratic waste. "If we had an honest debate in this country about health care reform," observed a long-time proponent of a national health program, "single-payer would win because it's the best, it's the cheapest, and it's the most effective."

DON'T EXPECT to hear an honest debate about health care among the candidates on the presidential campaign trail.

Most of the Republican contenders continue to champion the free-market approach to health care--essentially claiming that however bad the crisis may be, any action by "big government" would only make matters worse.

But the major Democratic candidates are pushing Massachusetts-style mandates that themselves were cooked up in free-market think tanks.

Barack Obama's plan centers on an employer mandate that was first called for by President Richard Nixon. As Himmelstein and Dr. Steffie Woolhandler pointed out in a recent New York Times op-ed, laws requiring employers to cover workers have already been tried--and failed dismally--in Massachusetts (1988), Oregon (1989), plus Minnesota, Tennessee and Vermont (1992-93).

"The costs of commercialization make it completely unfeasible to get people coverage that way," Himmelstein said in an interview with Socialist Worker. "Costs continue to go up. Employers rebel and either lower wages or shift people to part time."

On the other hand, Hillary Clinton and John Edwards favor versions of the Massachusetts law. But that law, too, was concocted by the right wing--at the Heritage Foundation, which seized on individual mandates as a means to outflank single-payer proponents, while expanding the private insurance market.

Over the past decade, "New Democrat" think tanks such as the New American Foundation and the Democratic Leadership Council's Progressive Policy Institute joined Heritage in championing mandatory insurance--assisted through tax breaks or government subsidies--as their neoliberal solution to the health care crisis.

The bipartisan support for the mandate model was on full display in 2006 when Romney signed the Massachusetts law--and was joined by liberal Sen. Ted Kennedy and Heritage's Robert Moffit.

It's on display in Clinton's presidential campaign, too. Clinton's choice for a health care policy adviser was Laurie Rubiner, a former aide to Republican Sen. John Chafee. Rubiner was the author of Chafee's health care proposal in the mid-1990s that called for ending employer-based health care and requiring everyone not covered by Medicare or Medicaid to purchase coverage.

Later, Rubiner joined the New American Foundation and began beating the drum for mandatory insurance as a Democratic idea. Little wonder, then, that today Rubiner says, "I don't see a lot of daylight between Hillary Clinton and John Chafee on the things I care about."

While Democrats and Republicans flock to the discredited (unless you're an insurance executive) free-market ideas of Nixon and the Heritage Foundation, most people in the U.S. continue to assert in polls that the change they seek is just what the Massachusetts doctors have ordered--a national single-payer program, similar to Medicare.

"It's getting harder and harder to marginalize the majority," said Dr. Deb Richter of Vermont Health Care for All earlier this month when some 200 people packed a Vermont State House press conference in support of a proposed single-payer bill for hospital care.

That bill, which has raised expectations for real health care reform, would fund hospital care for all state residents for less money than the state, employers and workers are currently paying--while cutting out private insurance completely.

Although this bill is limited to hospital care, proponents at the press conference made it clear that their goal is to get private insurance and the profit motive out of health care, once and for all. "They're parasites," said Dr. Marvin Malek. "And they're making a profit from people getting sick."

Tristin Adie contributed to this article.

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