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Mandatory healthcare insurance coverage schemes loom

When July 1st rolls around later this year, residents of Massachusetts will be required to have health insurance coverage. Required — by law.

This move is revolutionary and will, no doubt, have ramifications throughout the country, including Mississippi, and we appear to be at the beginning of serious dialog about our healthcare cost crisis.

A similar plan is now is being drafted in California and several other states, including Colorado, Maryland, Minnesota, New Jersey, New York, Ohio and Oregon. Mandatory health insurance coverage has arrived in America.

Focus intensifies

All eyes are on Massachusetts since its program is the first to be implemented. If the program is successful there, then other states, and possibly the federal government, will likely follow suit.

Naturally, each state has a different approach to implementing, and financing, mandatory health insurance coverage. Most of the plans, however, share some common features. All provide for sharing the costs among patients, employers, providers, insurers and taxpayers. For example, the California plan would require firms with 10 or more employees to offer health insurance to their workers or pay 4% of their payroll into a fund to buy coverage for the poor.

Doctors would contribute 2% of their revenues to the fund and hospitals would be dinged for 4% of their revenues.

It is apparent to me that the California plan won’t work in Mississippi without substantial changes. It would be far too expensive for poorer areas, like ours, with such a large portion of the population uninsured, to fund the program as currently proposed. I fear that the assessments provided in both the California and Massachusetts plans would fall short of funding mandatory health insurance for those currently uninsured in our state.

Friends and foes

From a political standpoint, both parties are finding some things they like about the mandatory health insurance plans that are under consideration. Everybody, without exception, is concerned about access to healthcare. Democrats like the all-inclusive aspect of the proposed plans. Republicans like the personal responsibility and private sector emphasis.

Nobody, apparently, believes that turning health insurance entirely over to the federal government is the best solution.

As might be expected, this initiative has some strong opponents. Some are forecasting disastrous consequences of any attempt to mandate health insurance coverage.

Predictions of companies eliminating jobs to stay under the minimum thresholds of mandated coverage abound. Substituting temporary or contract workers for salaried employees is another concern. Adding incentive for even more off-shoring of American jobs is another objection. Some of these concerns and objections are, no doubt, legitimate; however, the mood of the country seems to be that something must be done to improve access to healthcare for Americans.

Surprisingly, there are some predictions that mandatory health insurance could reduce employer’s healthcare expenses since many of the uninsured are young and healthy and including them in the system could lower individual rates for older workers.

Growing the mess

Our healthcare troubles began in 1966 when Medicare was signed into law. While no one begrudges our elderly citizens access to healthcare, Medicare placed the federal government in the healthcare business. The camel got his nose under the tent!

Medicare was followed by Medicaid, which further brought government intrusion into the healthcare arena, this time at the state level.

And now, some 40 years later, we have a heck of a mess. Doctors and hospitals over-bill their patients to fool the government and the insurance companies. The insurance companies don’t care too much since they merely raise employer premiums to pay claims, whatever they turn out to be. An estimated 65% of healthcare dollars go to pay for the paperwork deluge required to satisfy the government and insurance companies.

Regardless of the cause, the cost of healthcare has gone through the roof. A mere visit to the emergency room by an uninsured patient can wipe out a lifetime of savings. All this is directly attributable to government interference in the healthcare market place.

The situation, as it exists today, is untenable. Something has to be done. Whether access to healthcare has become another basic right of American citizenship has yet to be determined but a lot of folks believe that it has.

Is mandatory health insurance a good thing for America? I’m hesitant to endorse anything that increases regulation and cost and mandatory insurance does both. However, it seems to me that, should these experiments with mandatory insurance fail, a takeover of the healthcare industry by the federal government is a very real possibility.

If you like how Medicare and Medicaid operate now, you’ll love even more government control over the healthcare industry.

Thought for the Moment

Labor to keep alive in your breast that little spark of celestial fire called conscience.
— George Washington (1732-1799)

Joe D. Jones, CPA (retired), is publisher of the Mississippi Business Journal. Contact him at cpajones@msbusiness.com.

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