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Sunday, October 11, 2009

One more time, again,How is the Health Care refrom in Massachusetts working out?

How many times have we heard the refrain "If you are happy with your health care plan you can keep it"? Well, we'll see what happens with the national health care overhaul but the Massachusetts plan sounds a lot like what the current health "reform" bills pending in Congress offer and here is one story of how a family kept their old plan but had to pay a fine to do it.

They had the choice of going with the state plan or paying a fine because the plan their had (a plan from IBM from which the husband had retried) did not meet the requirements of an acceptable or approved plan ,such approval coming from the wise oversight of the state regulators.

Here is part of the story as told by the wife and quoted in the WSJ:

For the first two years of the mandate, our IBM health insurance was seen as acceptable in the eyes of the state. This year the rules changed. The state requires that health plans cap out-of-pocket expenses for individuals (not including monthly premiums) at $2,000 a year. Our plan's cap is $2,500.

Ten years ago, we had excellent coverage through a more gold-plated plan. But we found that it was no longer worth paying the premiums and scaled back to a more modest policy. Today, we pay about $300 a month for catastrophic care. If we went with the next step up in plans offered to us by IBM, our monthly premium would increase to $800. We simply don't need to pay that kind of money for the amount of health care we actually consume.

Nonetheless, we now owe the state an extra $1,000. Ironically, that's about the extra amount we would pay out-of-pocket under our current plan if both of us actually fell ill in the same year.

From the description of this couple's economic circumstances it seems clear than they are likely not earning over $250,000 a year.

Another campaign promise often repeated after the election was/is that there will be no increase in taxes for people earning less than $250.000/yr . I have commented before that in the Baucus bill there are provisions that in effect raise the marginal tax on folks quite a bit below the 250 k level. A Harvard economist takes up that issue here in his commentary entitled " Marginal Tax Rates from Health Reform".

The WSJ story family is not hammered by the type of implicit tax planned for those folks who attempt to move out of the lower level of earned income but the fine they pay is just as real.

The Institute of Medicine tell us that there are five criteria that should be used to judge the adequacy of a health care plan. Here is how the Massachusetts stacks up in that context as seen by a commentary in the Boston Globe by a Massachusetts physician.

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