A few silly statements

A few silly statements

Arnold Kling’s caricature of the new Massachusetts health care legislation (Bill of Health) appears in Friday’s Wall Street Journal:

The elected leaders of Massachusetts have come up with a novel solution for the vexing problem of paying for health care: abolish the laws of arithmetic.

Kling says, “three numbers stand out”

  • The $295 per employee assessment on firms that do not provide health insurance
  • The $0 deductible for the “typical state-subsidized health-insurance policy” under the plan
  • The $6000 average annual expenditure on health care for a MA resident

According to Kling,

What insurance company will provide coverage with $0 deductible, at an annual premium of $295, for someone whose health care costs on average $6,000 a year? The numbers imply losses of over $5,700, not counting administrative costs. To subsidize zero-deductible health insurance, state taxpayers might have to pay out about $6,000 per recipient.

Now maybe we’re not smart enough in Massachusetts to become adjunct scholars at the Cato Institute (like Kling), but give us a little more credit than that.

  • The $295 is not the projected annual premium. It’s an extension of an existing assessment that employers who offer health insurance –but not those that don’t– already pay into the uncompensated care pool. The thinking is that we shouldn’t penalize employers who provide insurance; if uncompensated care is to be funded through employer assessments, the assessment should be spread over a broader base.
  • The $0 deductible apparently refers to the out-of-pocket cost under the plan for the lowest income residents. This will apply to a limited number of people, and in any case it’s not the goal of the legislation to have zero out-of-pocket costs. (Deductibles and co-pays are crude instruments anyway. There is even an economic argument to have a negative copay or coinsurance in some instances–pay someone to take their medication to keep their chronic illness under control, pay someone to go to a physician instead of the emergency room. ) Kling over-simplifies and distorts this one.

It’s kind of easy to do research at the Cato Institute. Everything is black and white –there’s no need to delve into nuances –just boil down a complex bill into three numbers and serve it up to the true believers. In Massachusetts we are a little more pragmatic and thoughtful. Yesterday’s Boston Globe has an article (Rally ’round the… employer assessment?) on the new plan and the way that people across the ideological spectrum have worked together to craft it.

Alan MacDonald, chair of the Massachusetts Business Roundtable,

…was part of the group of business leaders that helped break the legislative logjam… by signing on to the… employer assessment.

Meanwhile, Health Care for All leader John McDonough said,

“Let’s not be afraid to experiment and try out new things! It’s so much better than constantly engaging in the stupid ideological back and forth. Let’s embrace a[n]… amalgam of right and left approaches and learn from them.”

The bill is far from perfect, but it’s not bad.

April 10, 2006

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