Examining the Individual Mandate

The Wall Street Journal takes a hard look in Massachusetts

Hurrah! At last a major publication has looked in some depth at the central feature of the Obama-et-al health plan. For months we on Campaign Desk have been urging media of all stripes to look at what has been the ignored sine qua non of health reform, largely because the pols—for good reason—have kept voters in the dark about it, perhaps fearing that voters might not be too keen on it.

In an A1 piece by Vanessa Fuhrmans, the Wall Street Journal talked to ordinary folks in the Bay State and found, as we did, that requiring nearly every resident to carry health insurance doesn’t sit well with some of those who have to buy it. Ron Norton, an adjunct professor at a community college in Worcester, told Fuhrmans that he could not use up all of his savings to buy mandatory insurance. He said it was like penalizing “the homeless for refusing to buy a mansion.” His wife has insurance, but her employer does not cover dependents—so Norton went shopping and found that the cheapest policy he could buy for himself and his daughter cost $5,568 a year, with a $2,000 deductible for each. “It’s insurance you can’t possibly use,” he said.

Massachusetts residents we interviewed told us the same thing. High out-of-pocket expenses required by policies before insurance kicks in have prompted some people to say their coverage is just plain useless. The Journal talked to Harvard pollster Robert Blendon, whose job is, essentially, to read the minds of the electorate. This was his reading on health-care expenses:

If you’re talking about millions of people who will have to buy insurance by themselves, this could be a difficult political issue. Unless subsidies are substantial, you’re going to have middle-class resistance to this.

Indeed, early returns indicate that subsidies could face resistance from budget hawks in Congress, where the long knives are already out. The Baucus bill released this week calls for less total spending than the House versions. When the legislative sausage maker stops grinding, it’s possible that people all over the country, now required to buy coverage, will find themselves in the same pickle as Massachusetts residents.

Oregon Sen. Ron Wyden, for one, thinks affordability could be a big problem. It would require families with incomes around $66,000 to pay 13 percent of their income on premiums before they could qualify for a subsidy. That’s a huge chunk for any family. Wyden thinks the government should make subsidies available after a family spends 9 or 10 percent of its income on insurance.

Some, then, will find it cheaper to take the penalty—and the Journal talked to Peter and Kirsten MacDonald of Brockton, who did just that. The MacDonalds had insurance when Massachusetts enacted its reform law, but last year, when the monthly premiums reached $900, they dropped the policy and decided to self-insure. They set aside $750 a month and paid the required penalty, $2,136 (each adult pays a maximum of $1,068 this year). Before canceling the policies, the MacDonalds asked themselves: “What are we getting for it?”

The experience of Massachusetts can be instructive for the nation. If a bill requiring the mandate passes through Congress, it’s a good bet that millions of the uninsured would still be uninsured. Even paying $3,800, the highest penalty called for under the Baucus bill, a family whose income is $66,150—three times the federal poverty level—might find it cheaper than paying the premium. The average family premium is now over $13,000.

It would be great if news outlets all across the country followed the Journal’s lead and started looking at how the penalty math computes in their own communities. This is a case where the press cannot wait for the politicians to set the news agenda.

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Trudy Lieberman is a longtime contributing editor to the Columbia Journalism Review. She is the lead writer for The Second Opinion, CJR's healthcare desk, which is part of our United States Project on the coverage of politics and policy. She also blogs for Health News Review. Follow her on Twitter @Trudy_Lieberman.