Santa Monica, CA -- The Foundation for Taxpayer and Consumer Rights (FTCR) today warned that a Massachusetts universal care plan, which includes a requirement that individuals and families buy health insurance, not be considered a national model. Massachusetts's nonprofit health care market and existing laws are unlike most markets in the nation.
FTCR voiced concern about the affordability of the law, which requires families of three who make more than $49,800 per year to buy health insurance without any limits on what the insurer can charge. A true universal coverage model would use the bulk purchasing power of a public health program like Medicare that pays doctors and hospitals directly at the most efficient price with the lowest overhead and fewest middlemen.
The consumer group called for insurance premium regulation to guarantee affordability and warned against adoption of individual purchase mandates in states dominated by for-profit insurers.
FTCR pointed out what's good and bad in the new Massachusetts model:
- Massachusetts is dominated by not-for-profit insurance companies, so profiteering is limited, unlike in the national and California markets, where high-overhead for-profit companies dominate.
- The state requires insurers to sell policies to every similarly situated individual at the same price regardless of health status, past medical conditions, age or gender -- unlike the underwriting that exists in most markets. In most states, including California, insurers may charge more, raise rates or simply refuse coverage to the sick.
- Massachusetts' new rules will pay doctors and hospitals more for better health outcomes and cost reductions.
- Individuals have to pay for heath insurance or face tax liens that criminalize them, but there is no state limit on or regulation of how much insurers can charge. Massachusetts should require insurers to receive prior approval from the state for all rate increases.
- Patients with good health insurance through their employers may lose coverage because the bill allows employers to switch to "bare bones" high-deductible policies. Employers that don't pay for coverage under the new law pay only a $295 per year per employee fine -- a token provision.
- High-deductible plans encouraged by the new law will discourage preventive care and early diagnosis of disease -- which saves lives and money. Individuals will have to navigate a maze of policies that cannot be easily compared, as in the privately administered Medicare Part D drug benefit.
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The Foundation for Taxpayer and Consumer Rights (FTCR) is a nonpartisan consumer advocacy organization. For more information, visit us on the web at: http://www.ConsumerWatchdog.org