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Monday, May 15, 2006

Logic and the Massachusetts Plan

Those who pay attention to such things will know that Massachusetts recently passed a law designed to reduce the number of people in the state without health insurance. Among other things, the law

- requires companies with more than ten employees to offer and contribute to a health insurance benefit,
- requires all residents of the state to have health insurance,
- assesses a “fee” against those who do not comply, and
- subsidizes health insurance for people with low incomes.

The most controversial part was the requirement applied to employers. The Republican governor vetoed that provision, but the Democratic legislature quickly voted to override.

Whatever else one might say about it, the law enjoys a foundation in logic.

If we are to have a pluralistic, public/private system of financing health care, and if we believe that everybody should have health insurance, then we need to know who is responsible for making it happen.

We have already decided that the federal government will be responsible for seniors (Medicare) and that the states – with federal help – will be responsible for the poor (Medicaid). That leaves the employed population and its dependents.

For a number of reasons, the most practical way to offer coverage to the employed group is through employers. Almost all employers of any size already do.

Smaller companies have resisted being required to offer a health insurance benefit. In doing so, they are by implication taking a stand either against the pluralistic system of financing or against minimizing the number of uninsured. One doubts that they would be willing to defend either position openly.

Furthermore (as was repeatedly pointed out during the Massachusetts debate), since those who pay for care also pay for those who don’t, the companies that provide health insurance are, in effect, subsidizing the companies that don’t.

Whether the Massachusetts plan will prove successful remains to be seen. There are a number of hurdles yet to be overcome.

But logic is on its side.

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