Massachusetts Health System May Have Warnings for National Reform

04/09/2010

Several health insurance companies recently sued the Massachusetts government over its bans on premium hikes. The insurers said that such hikes were necessary in order to cover and maintain their customer base.

Governor Deval Patrick, in turn, has responded by criticizing the companies.

This is the universal health insurance system after which the national health care reform was modeled. A recent report by MarketWatch pointed to some of the lessons Americans and their lawmakers can learn by looking at the difficulties Massachusetts has encountered.

Many of these are budgetary. High premiums make it more difficult for small businesses and individuals to afford coverage, while the health care industry struggles to get their revenue. In addition to financial struggles, the universal mandate faces difficulties in enforcement.

"Although Massachusetts requires every resident buy health insurance, the penalty for noncompliance is cheaper than the monthly premium for an insurance plan," the report said. "People who game the system pay the penalty until they need insurance, buy a short-term policy to get care, then drop out."

The national health insurance mandate is slated to take effect in 2014. Like Massachusetts' program, it also features penalties for companies and individuals without coverage. This has been a focus of debate for many lawmakers who believe Congress overstepped its Constitutional rights.

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