Can the federal government apply an individual mandate like the one in Massachusetts across the country?
And how would the government enforce such a rule in very large states like California, with a population of 37 million, where 34% of non-Medicare age residents lack health coverage? How much would the feds charge uninsured Americans when they get sick? And how should the government collect fines for not getting insurance?
What about in Texas, population 24 million, where 42% of low-income residents under age 65 are now uninsured, and a state where many don't appreciate government intervention?
Massachusetts managed to reduce its percentage of uninsured to 2.6% (a drop from 10% to 12%) in just a few years by setting thresholds for people to purchase health insurance, either through their employers or from an array of state-approved plans. So far, state officials say, it's been a success.
With all filings for the 2007 tax year complete—the first year that fines were assessed—only 70,000 who earned enough money to be required to have coverage didn't file the required 1099 HC form with their tax filings to prove they had it, officials say.
And those who didn't get their required 2007 health policies by Dec. 31, 2007–through their employer, private insurance, or the Massachusetts system–paid a $219 fine, which was kept low during the first year of enforcement. There were 7,277 taxpayers who indicated on their 2007 tax returns that they wished to appeal the individual mandate penalty. Of that number, 2,478 actually followed up. Within that group, 1,813 appeals were approved.
It's too soon to say what has happened in the 2008 tax year, when the maximum fine, depending on age and income, was $912 for the year, because tax forms have not all been filed and reviewed, although state officials say they expect to find even better compliance this year.
Can the individual mandate work elsewhere?
Could other states get similar cooperation from its residents, and see such dramatic reductions in their rates of uninsured as Massachusetts has enjoyed?
Yes, most definitely, says Linda Blumberg, health policy analyst for the Urban Institute, who has written extensively on health reform and the commonwealth effort. What are needed are sufficient subsidies for lower-income populations, exemptions for the truly poor, and grants to help social services agencies get people enrolled, she says.
Jon Kingsdale, executive director of the Commonwealth Health Insurance Connector, which runs the Massachusetts program, concurs with that assessment. "Remember, there's going to be subsidies for people who can't afford it, and exemptions for people who are too poor to have access to the subsidies or because the (program) costs too much. The feds are talking about allowing that."
But Ian Duncan, a member of the 10-person Connector Authority Board, is extremely doubtful a Massachusetts-like plan could play well throughout the country, suggesting that it would be a "nightmare" to execute in most if not all other states.
Getting compliance in Massachusetts was relatively painless because the percentage of uninsured was already low and the state is relatively wealthy, he says. "There were really no implications for 90% of the population.
"But there's several things that will make this an absolute nightmare to administer at the federal level. It would be a bureaucratic nightmare," he says.
For starters, Duncan lists the difficulty for a larger state or federal government to determine what Massachusetts calls "minimum credible coverage." That coverage must include certain drugs and how that would be determined across the country would be problematic at best, he says.
Additionally, many employer plans that would otherwise qualify don't offer drug coverage, "even though everything else about the plan is gold-plated," he says.
"Go to a place like California, where 25% of people don't have health insurance, and you can imagine what this would be like." In other states, he says, "You'd have lobbying from people saying, ‘You can't cover birth control and abortions.' "
In many states, the number of legal immigrants, or documented workers, is an enormous issue as well, much more so than in Massachusetts, which made a decision to drop some 30,000 residents from the program last month for budgetary reasons. Covering undocumented residents would be politically charged as well.
And Duncan says there's the issue of deciding who should merit a hardship waiver, or what should copays be for certain types of care. "I think it's something quite beyond the scope of government bureaucrats to regulate. And because it's government money, the government would have to regulate every single detail."
Enforcement
Another problem is how to apply a requirement that one show proof of health insurance with a tax filing. "Do you really want the IRS to insert itself in people's lives to figure out whether people have credible coverage?" he asks.
And there is more confusion that would be compounded nationally with hundreds of thousands of employers asking that the policies they provide their employees, who may not meet Massachusetts' standards, qualify as credible coverage.
Duncan predicts endless regulations and bureaucracy that would lead to "a whole army of people enforcing it."
"Having the government try to do this would be like putting the Department of Motor Vehicles in charge of healthcare. Can you imagine that? It seems to me to be an impending nightmare."
Kingsdale and Blumberg heatedly disagree with Duncan's stance. Blumberg says that requiring citizens to show proof they or their employers purchased appropriate health insurance policies with their annual tax returns, or give income data showing they were exempt, is the best way to apply such a plan across the nation.
"The first line of offense in implementing a mandate is to structure reform so that voluntary compliance is affordable and easy," Blumberg says. That means not implementing a mandate that people don't think is fair, that requires people to spend too much of their income, "and you have to have a subsidy program for the modest income population, and require coverage that is meaningful," and exemptions for those who are too poor.
Penalties
Should there be a penalty for not complying or for ignoring the individual mandate? "Yes, because otherwise it's not fair," she says. "But no, we don't put people in jail for not paying it. Will we get to 100% coverage? No. But we can get very close."
Blumberg says that if some of the suggested proposals now being discussed in health reform bills come to pass, there will be more uniformity of coverage. "It would bring all the states up to a uniform level, and a much bigger expansion of the number of people eligible for pubic subsidies."
With grants to hospitals and other healthcare providers to encourage enrollment, "safety net providers are enrolling people right and left, and that's so the hospitals don't lose out on their reimbursement," she says.
Kingsdale also agrees that a universal mandate could extend across the country.
"The process has worked very smoothly [in Massachusetts]," he says. "We have no security at our office, an open plaza, and no angry taxpayers with pitchforks have showed up.
"Would it be simple, and easy? Probably not. I wouldn't want to tell you that. But is it do-able? Yes."