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Massachusetts Mandatory Health Insurance Purchase Law is No Model for California
Date:10/12/2007

the state estimates that 18% of the uninsured cannot afford insurance at all, including everyone making just over the subsidy cutoff of 300% of the federal poverty level.

"In just over two months, Massachusetts consumers must have health insurance or pay a penalty under the law. They will end up paying more for less health care -- an inevitable outcome when individuals are forced to purchase private health insurance and costs are not regulated," said Carmen Balber of FTCR. "Families with children, older consumers and middle class families are some of the most likely to be lacking health care. They're also the first to fall through the cracks under Massachusetts' mandatory private insurance plan because insurers won't provide an affordable product unless the state controls costs."

Few middle-income Massachusetts consumers have enrolled in the new mandatory coverage. Only 6% of new enrollees are buying private plans with no subsidy. Most of the remaining 94% of new enrollees are under 150% of the federal poverty level and receiving full subsidies.

"While it is beneficial to provide health care to the working poor, the Massachusetts plan is far from solving the un-affordability of private insurance for middle-income workers," said Balber. "The plan, with its very small employer penalties, also may encourage employers to steeply reduce or eliminate work-based coverage."

Key points

1.Massachusetts faces a simpler problem than California does: The state has 500,000 to 650,000 uninsured versus six to seven million in California. Unlike California, Massachusetts health insurers are primarily non-profit and the state had guaranteed issue and community rating before the mandate. Massachusetts' median annual income is also $15,000 higher than California's. Even so, it is not reaching the middle class.

Newly enrolled in Massachusetts' health insurance: 122,582 (approx. 20% of MA uninsured)

> 94% taxpayer subsidized

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SOURCE Foundation for Taxpayer and Consumer Rights
Copyright©2007 PR Newswire.
All rights reserved

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