Massive Mass Ifs (Part 1)

Here's the dilemna: on the one hand, I'm generally a pretty upbeat kinda guy. On the other, I'm also a pragmatist, so when I read about massive government programs that purport to solve a problem, it's second nature to ferret out what new problems the original "solution" created.

So what's my point, you may wonder? [ed: um, yeah!]

We've written extensively about the "new" Massachusetts health insurance initiative (here, here, and here, for starters). One of the overarching themes we've addressed is that mandatory coverage without significant, realistic inducements is a non-starter. We can see that happening already, because the Mass Health Plan officially "kicked in" yesterday (July 1st).

The response appears to be underwhelming: "since October, about 130,000 have enrolled in an expanded Medicaid program or insurance that offers free or subsidized care to the poor." D'uh! But the problem is that "free" isn't the same as "mandatory," and adding more "freeloaders" to an already strained Medicare system will inevitably lead to even more taxes. Vicious cycle, indeed.

But wait, it gets better (or worse, depending on one's perspective): Most folks get their insurance through their employers. In Massachusetts, employers are now required to offer health insurance (to the tune of thousands of dollars per year for each employee), or face a devastating fine (less than $300 per employee per year). Gee, I wonder how that's going to play out [ed: cynic!].

USA Today's article gives us some real world numbers to explore, which turns out to be pretty helpful: "Glen Baker, who runs five Wendy's restaurants with 140 employees in the state and offers health insurance to his workers" asks "(w)hat's this going to do to me?" Here's how his insurance premiums work out:

Single employees pay $180 per month, and those with dependent coverage fork over $540. Not too hateful, right? But that's only half the story (well, technically, less than half): those number represent only 45% of the total premium So single cover really costs $400 a month (of which Baker's company pays $220), and family cover is a whopping $1,200 (with the employer paying well over $600). Let's do the math: $220 a month, or $300 a year? $660 a month, or $300 a year? Einstein isn't really necessary here.

In Part 2, we'll look at how those subsidies really work.

Or don't.