Like many Americans, I watched the President’s speech on health insurance reform. It really is amazing how Obama is able to tell people the truth–that he will fuck them over–and they love him for it. For all the pretty words and formulaic yet effective rhetoric, what stood out most to me in the speech was the hard reality of what is coming in the form of mandates, taxes, and fines.
I was most surprised by his automobile insurance analogy. Apparently people have forgotten. Auto insurance was a movement that swept the nation too, an effort led by the insurance lobbying industry. For some states, it was particularly problematic. In Kentucky, where I used to live, premiums for car insurance shot up over 200% in the years directly following the law that was passed that required people to have auto insurance or pay a hefty fine. They have continued to rise thanks to a compliant state legislature, and today Kentucky has some of the highest auto insurance premiums in the nation. This affected poor people, and it continues to affect poor people. It basically penalizes poverty. What else would you call it when you can’t put food on your table because you can’t get to work because you don’t have auto insurance and want to avoid the $500 fine for not having it, which, if you had it to pay, you would have bought car insurance with in the first place.
The mandate was the one thing I vehemently disagreed with Hillary Clinton on. It was what stopped me from volunteering for her campaign earlier in the process. I knew what had happened with auto insurance, and I was aware of the so-called “Massachusetts model.” I was acutely aware of how this model would affect poor people, and that it wasn’t a bargain at all. I have been a working poor person for most of my life. Though I make more money now than I ever have, I still live paycheck to paycheck and my net paycheck remains unchanged from when I was making far less money, in part because health insurance costs have risen so high so fast (the other part is that my tax bracket changed). Make sure you absorb that: Though I make $15,000 a year more than I did just three years ago, my net paycheck is the same.
I want to talk a little bit about the Massachusetts model in order to introduce an idea that I have been mulling over for some time. The Massachusetts model, like the plans before Congress now, is also based on a mandate that, unmet by the individual, results in fines. I hate to use Wiki as a source, but they have assembled an impressive volume of research on the model. In addition to mandates and fines, the state of Massachusetts brokers deals between people who have no access to insurance (because they work for companies that can’t or don’t provide it; or because they work for themselves) and the insurance industry. The Massachusetts model does not pay any health care costs directly outside of SCHIP and MassHealth, which were the partially federally-funded programs in place before reforms took place.
What the reform means is that the state steps in as the broker for those who do not have health insurance and, via fines, forces them to buy insurance from private providers. Insurance companies were only too happy to have the deal, and as with the auto insurance fiasco, premiums rose dramatically. Still, people have to have health insurance now, so how to make them do it? How do you force someone to spend $3-5,000 a year on a service that will cost them probably another $3-5,000 in deductibles, when they are currently only paying about $500 a year directly for services, and then only when they need them*? How do you accomplish that neat trick? Well, you can take money they count on, like their tax return.
*Obviously I am referring to reasonably healthy uninsured people here
Initially, the Massachusetts tax penalty might have seemed paltry. It was the loss of the personal exemption, apparently valued at just over $200 a year. In 2008, however, the tax fine jumped to half the cost of the lowest premium available, roughly $912, according to the Wiki article. The article doesn’t say, but I would bet that the fine is scheduled to rise, as it has every year since they passed reform in 2006. And this brings me to my conspiratorial musings on what might happen if the United States adopts the Massachusetts model.
Some people who read this blog may be unfamiliar with how working poverty works. The working poor do not generally make enough money to meet all the demands placed on them by the government and society in general. As a working poor person I can tell you that I felt terrible that I often had to drive without insurance, but I did have to do it because I had to work to pay rent, buy food, clothes, and school supplies for my daughter. I had to pay to “rent” her textbooks. I had to keep the piece of crap vehicle I could afford in working order which, because of the age, was costly and frequent. I had to pay increasingly outrageous utility bills. I had to have a phone in case we had an emergency. It should go without saying that our access to health care was spotty and expensive. This all adds up and can quickly overwhelm a person making $10 or less an hour. Add to that the $150 monthly premium for liability-only auto insurance and you can see how this life is constantly impossible, but somehow we make it. We working poor people juggle and balance, we strategize, and we take risks we don’t want to take, like going without car insurance, because we have to.