Arnold Kling  

Massachusetts Health "Plan"

The Common Sense of Scapegoati... Arlo on Happiness Research...

I don't know exactly what the legislators of Massachusetts voted for, and I suspect that neither do they. Here is the story.

The measure does not call for new taxes, but would require businesses that do not offer insurance to pay an $295 annual fee per employee.

...The state's poorest are the biggest winners. Single adults making $9,500 or less a year will have access to health coverage with no premiums or deductibles.

Those living at up to 300 percent of the federal poverty level, about $48,000 for a family of three, are also big winners. Under the bill, they will be able to get health coverage on a sliding scale also with no deductibles.

Massachusetts is a state where health care spending averages over $6000 per year per person. My guess is that a $295 per year penalty is not enough to convince an employer to offer health insurance to an employee. Particularly if the employee qualifies for some sort of plan that is subsidized by the state.

Another feature of the plan is that individuals must obtain health insurance or pay a penalty. In a previous version, you could avoid paying for health insurance by posting a bond that guaranteed that if you were treated you would pay. I wonder if that option survived in the final bill.

The wording that stands out in the story on the legislation is "no deductibles." Thus, Massachusetts appears to be taking a strong stand in favor of what I call "insulating" people from health care costs and against what I call "real health insurance."

Those of us who favor market-oriented health care believe that deductibles are too low as it is. But Massachusetts wants to enshrine no-deductible health care plans.

The Governor of Massachusetts, a national socialist Republican with Presidential ambitions, plans to sign the legislation. I hope that we have at least five years to observe what this does to Massachusetts before somebody decides to implement it nationwide.

Comments and Sharing

COMMENTS (12 to date)
T.R. Elliott writes:

Silly not to have deductables. If they think the very very poor cannot afford deductables, deal with that separately.

My last company had a small fee attached to tickets for the company holiday party. And the company picnic. The fees were small. No way they even came close to covering the expense of the affairs. But it helps the company plan on how many will attend. Less waste. Free tickets == no cost to grab a couple tickets even if not planning to attend.

Bill writes:

Sheesh! Even Germany is going away from the "no deductibles" thing. This bill will only make things worse. How very sad.

JohnJ writes:

Nothing good comes from Massachusetts.

T.R. Elliott writes:

"Nothing good comes from Massachusetts."

Nonsensical stereotype. The minicomputer revolution originated there and the microcomputer revolution from CA and WA.

It also has one of the highest incomes in the US, highest per capita gross state product, etc etc etc. Oh yeah, and lowest divorce rate.

If only the other states could be so successful.

JohnJ writes:

It was a joke, man. Lighten up.

JohnJ writes:

If Mass. is so great, why are people fleeing it?

Ron writes:

Insurance is only part of the healthcare problem. How many hospital beds do they have, what are their nurse staffing ratio's, do they have adaquate number of doctors and other healthcare providers. Nationwide there is a shortage of nurses, X-ray techs, respiratory therapist, pharmacist etc. All the newly insursed will have access to what?? A waiting line. It is not usual for one of our local hospitals to refer patients to another because they don't have adequate nurseing coverage. Or does Massachusetts plan on offering higher salaries to attract more healthcare professionals? Perhaps Robin Hanson should start a betting pool on how long before a significant deducable is implemented, or rationing of care, or the system goes bankrupt among the many possiblities. It certainly bares watching.

T.R. Elliott writes:

"If Mass. is so great, why are people fleeing it?"

"I think it is sort of the burst of the high-tech bubble and the unusually high housing costs," said demographer William Frey, of the Brookings Institution in Washington and the Population Studies Center at the University of Michigan, who analyzed the newly released estimates.

"Young people are leaving, all those college students are leaving and heading to areas with a better job market and lower housing costs," Frey said.

Don't get me wrong. Massachussetts has problems as does any other place. There is no nirvana, libertarian or marxist.

Massachussetts had great success in the minicomputer revolution of the late 60s, 70s, and early 80s. A lot of capital went into this, and they did very well. Then the world changed, and success often breeds lethargy. The ball was passed to CA and WA (e.g. Intel, Sun, Apple, Microsoft). There were also a host of spin-offs from R&D at MIT, the radar lab as an example, leading to a whole host of companies post-1940s. This also changed. Massachussetts is doing very well considering.

And things have evolved since then. Real-estate prices in Massachussetts and California have become prohibitive. But then again, I know a couple who just sold their San Diego home and are now moving back to Boston. I know lots of local kids here in San Diego who are heading to Boston colleges.

"It was a joke, man. Lighten up."

Agreed. I've just grown bored of these jokes. There are too many fallacious memes propagating around. People then selectively mine and use them to "prove" their ideological predispositions.

Jody writes:

The primary reason MA has the lowest divorce rate is it has one of the lowest marriage rates.

In terms of divorces per marriage (I think in general a better metric), it's 9th or so (8th if you exclude Nevada which skews every state's stats), which is pretty good, but it's a little misleading to say that MA has the lowest divorce rate.

spencer writes:

Making a ratio of the divorce and mariage rates is an invalid comparison of two different groups -- it it is adding craps and apples to get crabapples.

Jody writes:

Assuming you're not joking Spencer, as T.R. correctly cites, MA has the lowest annual divorce rate per 1,000 people (2.4). However, T.R. (and others) generally cite this statistic to make the case that people in MA are especially moral (and it seems reasonable that is why T.R. is citing it here).

However, the primary reason for the low divorce rate is because MA has one of the lowest marriage rates (about 6.2 per thousand). So in my eyes, praising MA for its low divorce rate is equivalent to praising eunuchs for not fathering out-of-wedlock children.

What we really want to measure if we want to discuss how seriously MA takes marriage (which I believe is the implicit claim being made) is the rate of marriages that end in divorce.

Divorce rate/Marriage rate gives a pretty good estimate of marriages that end in divorce, though it fails to capture movement between states (which makes it at least as good as Levitt's abortion claim), a problem that is particularly evident with Nevada (virtually no one runs away to Vegas to get divorced).

The two states that do the best with respect to divorce/marriage after ruling out the eloping factor are DE and SC. However, that combination doesn't make for a good political hammer (one blue, one red, neither that central to either side's self-conception) so it doesn't get brought up much.

(And as I noted above, MA is still top 10 under this more meaningful metric, just not #1.)

T.R. Elliott writes:

See, you learn something new every day. That metric, divorce per marriage, is more accurate. I agree.

Of course, it's totally bogus for me to pull that divorce rate statistic out of the hat. I have no clue what it means. It wouldn't go as far as to say that the people in Massachussetts are particularly moral. I'm just throwing useless statistics around for no good reason.

Standing up for Massachussetts. I used to live and work there. Have to fight for your own, you know.

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