Unsubsidized health insurance plans under the new Massachusetts mandatory health insurance scheme

Facing up to insurance changes - The Boston Globe

The March 24, 2007 edition of the Boston Globe features a story about how relatively unaffordable the new unsubsidized health plans offered under Massachusetts' new mandatory universal health insurance law will be to lower middle-income individuals who earn between $30,000 to $70,000.

While the article focuses on the high deductibles and out-of-pocket expenses that make these plans relatively unaffordable for some, it doesn't do a very good job at outlining one of the main ways that a mandatory health insurance coverage law can help prevent poverty - by helping to prevent the catastrophic economic loss that uninsured individuals with a severe illness or injury sometimes face.

One of the Globe's vignettes reports on one woman, Betty Gitlin-Rich, who is eager to sign up for the plan. The woman tells of a time when she became extremely ill and almost died during a time when she was uninsured. In the article, Ms. Gitlin-Rich notes how she cried in the emergency room about how she would afford the care. The Globe further reports,

The state's free care program covered most of her hospital costs, and she is extremely grateful for the financial help and the care she received. But the family is still paying off more than $17,000 in medical debt, she said.

The new mandatory health scheme in Massachusetts is far from perfect, and the unsubsidized health plans which the Commonwealth requires leave much to be desired. However, as this vignette illustrates, the mandatory health insurance scheme in Massachusetts is a step in the right direction for two reasons:

First, by requiring people like Ms. Gitlin-Rich to pay for health insurance when she can afford it (even if its somewhat of a burden on her), and helping her through subsidies or state-run health insurance programs when she can't, Massachusetts may have the opportunity to focus more of its health care spending on preventative care. Greater preventative care, in turn, may lower overall spending on health care (although the latter is true remains to be seen).

Second, mandatory health insurance may have the effect of protecting people from the massive medical bills associated with catastrophic illness. This also could save the government money in the long run, since protecting people from massive medical bills may have the effect of keeping them off public support (particularly in cases where there is no resulting long-term disability associated with the medical problem). At the very least, the money otherwise spent by the uninsured on repaying their medical bills would be spent on other items or necessities, or perhaps even saved for later use or retirement.