Reinventing Health Care

IN ANNAPOLIS: Requiring people to be insured would help reform system

March 12, 2009

At the State House, enthusiasm for health care reform has been tempered by the realities of a recession and starkly declining tax revenues. A further expansion of Medicaid eligibility will likely be put on hold. Ditto for an ambitious plan to lower health care costs and extend insurance coverage through a fund financed by payroll and sin taxes.

But there is one idea that may advance despite the economic woes, and it could mean better health care for thousands of Marylanders without great cost to the average taxpayer. The concept is called individual mandate. Many recoil at the idea of government telling them to do anything, but with health care costs skyrocketing, expanding the numbers of insured Marylanders could work to everyone's advantage.

In laymen's terms, an individual mandate means people who earn enough to buy health care insurance would be required to do so. While that doesn't necessarily solve the health care crisis, it should make a big dent - about 60 percent of Maryland's estimated 760,000 uninsured are employed adults.

One proposal offered by Baltimore Del. Peter A. Hammen would require individuals who earn 300 percent of the federal poverty guidelines ($66,150 for a family of four) to buy insurance. Those who don't would be subject to a tax. Employers who have at least nine full-time workers and do not provide health insurance also would be assessed a per-employee penalty. All revenue would be used to help pay for insurance for low-income individuals.

A much more modest proposal by Montgomery County Sen. Robert J. Garagiola would apply the mandate to children only. The program would last three years, and the penalty for failing to comply would be modest indeed: the loss of a $25 to $50 state income tax break equal to an out-of-pocket cost of about $2.38 a year, making the mandate symbolic at best.

In either case, the essential premise is the same: If the health care crisis is to be solved, everyone must be required to pay his or her fair share. Too often, those who choose not to buy insurance are a hidden cost for the rest of us - most commonly in the form of higher insurance rates to finance uncompensated care. Maryland now pays, on average, $1 billion a year to reimburse hospitals for such care.

In Massachusetts, the first state with an individual mandate, more than $4 million in tax penalties was collected last year from the uninsured. Businesses in the state have to make a "fair and reasonable contribution to coverage" or pay a $295 assessment per worker per year, a requirement expected to eventually generate $30 million annually.

An ill-timed financial burden on business? Perhaps for some. But the high cost of health insurance is the real back-breaker for employers, and extending the umbrella of insurance should make health care more affordable for all. As the nation's new president has pointed out, the current recession isn't a time to hide from health care costs, it's the overdue moment to confront them.

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