Health Care in Taxachusetts

In last Friday's Journal, CATO Institute adjunct scholar Arnold Kling criticized Massachusetts' new law that seeks to guarantee and require health insurance for all residents of means. Kling insinuates that the Massachusetts legislature is naive enough to think that it will raise sufficient revenue by fining delinquent employers ($295/year for each uninsured employee) to subsidize the insurance of those who remain uncovered. But, he sagely hypothesizes, in a state where $6000 is the average annual health care expenditure per individual, no insurer will provide coverage that cheap. Consequently, employers will blithely pay the fines while the Massachusetts treasury is be emptied -- Bay State workers magnanimously dumping their tax dollars into insurance company subsidies.

"The only way to make zero-deductible health insurance available at low cost is with a large subsidy; how much will depend on negotiations with insurance companies." Here the CATO scholar shows admirable candor. For it sounds as if he is admitting that there is room for negotiating how much profit insurance companies will make. How will the "gains from trade" be split between the Massachusetts taxpayer and the insurance company shareholder? Will the later have to show a little magnanimity themselves, as they are asked to split the difference with the former?

The point of Kling's editorial, of course, is to suggest that $0 deductible policies make people consume more health care than they would or should. But, to his credit, even here he magnanimously acknowldges that patients are deterred, at least to some extent, by "the time and discomfort involved in getting medical care." It is refreshing to hear someone from these quarters admit that well people are not lining up to get into emergency rooms for the fun of it. I think we all know people who have avoided seeking "free" medical care even when they really needed it because of the unpleasantness, stigma, and lost wages of taking the day off to go to the doctors.

This is a fine editorial. I wish more free market pundits were as magnanimous as Kling.

Author' Note: The word "magnanimous" is used three times in this entry (only once correctly) because of a joking bet on that score into which the author entered.