When it was announced that a form of universal health coverage was coming to Massachusetts, quite a few people on our side of the aisle were excited by the news. After all, isn't universal coverage something progressives have been striving for for the better part of the last century? There were a few notable dissenters, however. John Sweeney of the AFL-CIO was perhaps the loudest, and while I think his criticism may have been a bit harsh, I agree with his general read of the situation.
This legislation leaves middle-income families dangling without a safety net, jeopardizes families who currently have employer-sponsored health care, and gives employers a free ride.
The bill protects workers with the lowest incomes, but punishes middle-income families. A typical family in which the husband and wife each earn a little more than $30,000 and who have two children would be forced to purchase health care, but would not be qualified for any help even if their employer does not offer any coverage or they can't afford their share of the premium. With the average employer-sponsored insurance premium costing more than $4,000 a year for single workers and close to $11,000 a year for working families, Massachusetts' new requirement will bankrupt many middle-class families.
Yesterday at The American Prospect, Robert Kuttner waded into the debate as well. He exhibits some mixed emotions, seeming to come down on the side of of those who would say this is not a great bill, but is perhaps the best we're going to get at the moment, even if it is based on "three dubious assumptions" made by Governor Mitt Romney. They are "that basic health insurance could be had for $2,400 a year,""that 'market reforms' could liberate hundreds of millions of wasted dollars to redirect to coverage," and "that health insurance is like auto insurance; government should just make everyone buy it." Economic writer that he is, Kuttner sums up the facts about the bill quite well.
Given these limitations, the bill that finally emerged is a small miracle. It cobbles together several pots of money -- Medicaid, the existing uncompensated-cost pool, projected savings from "market reform" and from sick people being treated by doctors rather than in emergency rooms. It adds $125 million a year in new state spending, and another $50-100 million from proceeds of a $295 per worker charge and other assessments to be paid by employers who fail to provide insurance and whose workers disproportionately tap the free care pool. Romney delicately calls this new tax a "fee." It is pitifully low, compared to the several thousand dollars per worker that insurance costs. It is far too feeble an incentive to induce any non-insuring employer to provide decent coverage, but it was all the business lobbyists and Romney would deign to accept.
The key criticism there is the same one made by the folks PLAN. The $295 fee per uninsured employee is an absurdly small stick with which to disincent employers from refusing to provide coverage to workers. When the pay for CEOs is averaging somewhere in the neighborhood of four hundred times that of workers, it's ridiculous that the corporate penalty for not insuring their workforce should be over three times less than the penalty imposed on the workers.
The need for universal health coverage is rapidly becoming an unavoidable fact of American life. There are a variety of ways this can be achieved and, to be sure, the Massachusetts plan is one of them. But as John Sweeney points out, it's straight out of "the Newt Gingrich playbook for health care reform." It's largely a 'market-based' approach to a problem that the market has consistently proven incapable of dealing with effectively. Worst of all, while it may not be so bad for those living in poverty or those whose employers wouldn't dream of taking away their health benefits, the hardest hit are the middle class. At the median income level, the bill for quality health insurance represents a huge chunk of the family budget.
The progressive alternative to this is some form of increased public involvement in healthcare, whether it's in the form of a single-payer system or a hybridized system of public subsidies and private add-on coverage. Point being, the Republicans are warming up their healthcare fixes, from the Massachusetts plan to Health Savings Accounts, and I'm not hearing enough from Democrats about alternative proposals. This is one debate we cannot afford to lose.