Over the last few weeks, there have been conversations across the blogosphere about how best to reform health care. Although most of us rightly see single-payer as the best and most effective way to get universal health care, some are seduced by the “mandated coverage” concept. Mandated coverage means every person must buy insurance if their employer does not provide it – works much like auto insurance. I have argued that this plan is deeply flawed, as it will be nothing but a crushing financial burden to many people, and do nothing to solve the crisis in health care.
Today’s LA Times carries a story that has disturbing proof of these concerns.
The core of the problem is that, as I was concerned, the “mandated coverage” does nothing to rein in costs. Insurance companies are free to charge whatever they wish in premiums – even if you are, like me, young and healthy. As Jordan Rau, the author of the LA Times article, notes:
People earning more [than 250% of the federal poverty line] would be required by law to have, at a minimum, a high-deductible catastrophic insurance plan. Such policies, which the administration says cost about $1,200 per person a year, would not pay for anything until a patient’s annual medical costs exceeded $5,000.
And families could owe as much as $5,000 more in co-payments before insurers absorbed further medical bills.
$1200 a year translates to $100 a month, which is a very significant amount of money for someone living in high-cost California and yet making only $30-$40K. With potentially $10,000 in costs, it seems that this proposal is not “universal health care” at all, but is simply another way for insurance companies to legally rob and steal from working people.
Some have argued that these concerns are overly pessimistic and that by bringing so many young and healthy people in, premiums and deductibles for everybody will be lower. As the article goes on to note, Massachusetts, which recently passed a mandate law, proves this to be terribly wrong:
When a state board [in Massachusetts] created to help arrange coverage sought bids, insurers proposed premiums far above state projections: between $3,000 and $6,000 a year, depending on a person’s age. Massachusetts is soliciting new bids for less comprehensive coverage than originally planned.
Those costs – anywhere from $250 to $500 a month – are simply unaffordable for people making just over the cutoff point for subsidization (250% of the federal poverty line). Massachusetts is looking for new bids, but it is by no means clear they will meet with much success. Either they force insurers to lower premiums – an unlikely event – or they scale back what the mandated coverage would actually cover, rendering the whole scheme almost meaningless.
Who are the people who would be screwed by a mandated coverage plan? According to Rau, they include:
fitness trainers, retail sales workers, child-care workers, actors, dental assistants, artists, social workers, construction workers and legal assistants. Many retired people and those in part-time jobs also routinely earn just a little more than the cutoff amount.
By now it should be clear to you – Arnold’s mandated coverage proposal would be a catastrophic blow to those of us in this precarious strata of the wage scale. It must be stopped.
It is also significant, I believe, that these mandated coverage proposals come from Republicans – Mitt Romney in MA, Arnold Schwarzenegger in CA. The entire concept of mandated coverage is inherently Republican and conservative – forcing people to fork over their income to a corporation that will maybe provide some small level of service (note that all these mandates merely require catastrophic coverage). The costs will cripple millions, enrich insurers, and leave the core problems of the health care system totally unaddressed.
In 2006 Sen. Sheila Kuehl helped get SB 840 – single-payer universal coverage – passed by the CA state legislature. It was vetoed by Arnold. Both Democratic gubernatorial candidates – Steve Westly and Phil Angelides – said they would have signed it. SB 840 is the ONLY thing we who claim to be Democrats can support. It would provide real, meaningful coverage to Californians without bankrupting or crippling millions of working Californians. None of us who claim to support health care reform can seriously back mandated coverage. It is an unmitigated disaster.
In the end, it won’t be Californians without coverage who benefit from Arnold’s plan. Instead it will be insurance companies, credit card companies (because these workers of the lower middle class will have to resort to credit cards to pay bills and other living costs that the money spent on mandated coverage used to cover), collection agencies…and, ultimately, the wedding industry.
