The Massachusetts experiment shows that under a mandatory purchase system, insurers will use both price increases and coverage reductions to boost profits from a captive customer base:
* Proponents of the Massachusetts mandatory purchase of private insurance sold it on a promise of comprehensive health insurance for about $200 a month. In fact, premiums for health plans for a 55-year-old through the Massachusetts state pool reach up to $531 per month for basic coverage.
* The same 55-year-old wishing to purchase more comprehensive coverage will pay up to $906 monthly.
* Insurers in Massachusetts have already signaled that prices will increase next year.
2. Mandatory purchase of private insurance will lead to more high- deductible, bare-bones policies.
Unregulated mandatory purchase of private insurance regimes have only one method of suppressing premium prices: selling higher deductible policies that provide less coverage. Studies show that higher out-of-pocket costs force people to delay care until conditions become chronic, when treatment is more expensive and good health outcomes less likely. Such manipulation is already evident, even without a mandate.
* In addition to dramatic premium increases, many individuals and families already face unaffordable out-of-pocket costs in the form of deductibles of $2,000-$5,000 a year or more in addition to physician co-pays. The Kaiser report found that 95% of workers face additional costs for hospital admissions, such as separate hospital deductibles, co-pays and per diem charges.
* The report also found that the number of workers whose policies
provide no out-of-pocket limit increased to 29%. Without caps on
out-of-pocket costs, regulators do not have the tools they need to prevent
cases like that of P
|SOURCE Foundation for Taxpayer and Consumer Rights|
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