A public plan for healthcare
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THE SUCCESS of Massachusetts' three-year-old experiment with universal health insurance has made it a focus of attention as Congress and the Obama administration weigh reform on a national scale. But Massachusetts isn't a model for everything. A case in point: the debate over whether national legislation should include a public insurance plan as an option for consumers who don't qualify for Medicare and Medicaid and cannot get coverage through employers.
The architects of reform in Massachusetts opted not to create such a public plan, and opponents of the idea, such as private insurance companies, make much of that decision. Private insurers fear that a public plan would use its bargaining heft to drive down costs and grab a disproportionate share of the market. Advocates of a public plan, such as President Obama, say it is the best way to ensure affordable coverage and to provide a yardstick for the private plans.
So, does the Massachusetts example clinch the case against a public plan? No.
As noted by speakers at a conference recently at Harvard's Kennedy School, this state could avoid a public option because it already had a highly regulated insurance system that ruled out some of the more unsavory features of laissez-faire private insurance. Companies in Massachusetts could not refuse customers because of preexisting conditions or reject policy renewals after health problems emerge. Insurers could charge higher premiums based on a customer's age or place of residence, but not health history.
The state required that insurers cover many treatments and procedures, such as special screening of newborns, beyond the bare-bones policies offered elsewhere. It had a relatively low number of uninsured residents to start with. And, almost alone among the states, Massachusetts had no for-profit firms among its major insurers.
With a national health reform debate looming, some major private insurers have said they could live with a requirement that they accept all patients if it is paired with an individual mandate, like the one in Massachusetts. This would ensure that the young and healthy join the risk pool and lower its overall costs. But the Massachusetts rules would hamstring the private insurers that specialize in excluding anyone with a preexisting condition and providing as little care as possible to everyone else.
As the debate in Washington swirls over creation of a public plan, its supporters should not be cowed into dropping their insistence on it. Massachusetts is getting along without a public plan, but the national health insurance market is vastly different.
