Health Insurance Blog

Kay Lazar from the Boston Globe is reporting that the Massachusetts Department of Revenue is raising the monentary penalties charged to individuals without Massachusetts health insurance.

The fines are levied monthly. If an adult over the age of 27 and earns over $31,212 per year, as of 2009 they will now have to pay $1,086 per year for being uninsured. An uninsured adult from 18 to 26 years of age making that amount must pay penalties totaling $624 per year. There is a sliding scale for individuals with lower salaries; people making less than $15,612 are eligible for health care subsidized by the state and therefore don’t have to pay any penalty.

The state of Massachusetts passed a 2006 law that requires all adults (age 18 or over) to have health insurance if the Commonwealth Health Insurance Connector Authority determines they can afford it. The policy is intended as a way to transition the state to universal healthcare. Kay quotes a Dept. of Revenue commissioner, who says that last year, 5% of adults that are required to buy health insurance didn’t obtain coverage.

(Photo credit: wallyg under CC 2.0)

Kevin Freking from the Associated Press has just reported the reaction to President-Elect Barack Obama’s health care plan from America’s Health Insurance Plans (AHIP). AHIP is the leading health insurance industry trade group.

At the National Press Club, AHIP announced that it generally supports the Obama administration’s ideas for health care reform. However, they strongly oppose a proposed requirement that large- and medium-size employers must either contribute to their employees’ health insurance or pay a percentage of payroll to a national insurance plan. President and CEO Karen Ignagni claims that given the current state of the economy, any sort of employer mandate is a bad idea.

AHIP also doesn’t support comprehensive coverage mandates imposed by the states, preferring a national plan for small businesses that covers essential services such as emergency and primary care. This plan would exclude services that significantly increase monthly insurance premiums and those that insurers consider unproven. Consumer advocate groups believe that this will reduce the effectiveness of individual health coverage.

Politicians and industry representatives agree that they would like changes in health care policy to happen soon, before the new administration gets distracted by other issues.

There has been a considerable amount of discussion surrounding the health care proposals from presidential candidates Obama & McCain, however state-level health care plans haven’t received much attention.

Arizona in particular has a health care initiative on the ballot called Arizona Proposition 101.  If this proposition were to pass, the state of Arizona would be blocked from enacting a universal health care plan.  Essentially it would block Arizona from moving towards a health care platform like the one that is currently in place in Massachusetts, which requires all residents to purchase health insurance or pay a fine.  In addition, if Proposition 101 passes it will serve as a basis for a legal challenge should the federal government move towards a national health insurance mandate.

More information about health insurance in Arizona.

Senator Barack Obama has not released specific details about his health care reform plan, although he has stated that universal health care is his ultimate goal.

The Commonwealth Fund has released a detailed plan which they claim is very similar to Obama’s plan. and it can be inferred that the it can be used to fill in the blanks for the missing pieces within Obama’s Plan.

One of those “blanks” that the Commonwealth Fund has outlined is a “Play-or-Pay mandate” on employers,  I.e. companies that do not provide employer-sponsored health coverage to their employees will be penalized with taxes.   The National Center for Policy Analysis (NCPA) estimates that this would amount to an additional 7% payroll tax.

John Goodman, the President of the NCPA says

During the Democratic primary, Sen. Obama criticized Sen. Clinton’s proposal to mandate health coverage by asserting she would try to force people to buy something they cannot afford and then tax them when they don’t buy it leaving them worse off than they were.  Exactly the same criticism applies to Obama’s pay-or-play mandate.

Goodman went on to say that

A tax on labor (or mandated labor benefits) makes employment more expensive.  It encourages employers to hire fewer workers, adopt labor-saving technology, employ part-time workers, and outsource labor.

There are many unknowns in how this plan for health care reform would actually play out,  but many experts and think tanks, such as NCPA, believe that the costs will be much higher than Sen. Obama’s advisers predict, and achieving universal health care will be more difficult to achieve.

To read a more comprehensive and nonpartisan break-down of the Obama health plan, visit http://www.ncpa.org/pub/ba/ba628/.

The above commentary is the opinion of the NCPA, there are likely many other think tanks that are firm suppporters of Obama’s plan.  In the coming weeks, we will summarize and present the opinion of other organizations that have contrary views.

At the Democratic National Convention, Barack Obama pledged to fight for Universal health care if elected, and vowed to finally keep the promise of affordable health insurance and accessible health insurance for all Americans.

Although specific plans about how his health care plan would work, the Democrats stand behind a platform of Universal health care and believe it to be a shared responsibility between all constituents including employers, employees, health insurance companies, providers, and of course the Government.

Fifteen years ago, President Clinton had a plan for sweeping health care reform that failed miserably partly as a result of alienating both legislators and insurers.   Obama will likely learn from the mistakes made in the past and move gradually towards the end goal of universal health care, while keeping key constituents involved in the process.

Possible first steps for Obama health care reform could include expansion of existing programs such as Childrens health insurance programs at state level, as well as making Medicare available to early retires, who currently pay large monthly premiums for individual health insurance.