In Massachusetts People are Gaming the System
The number of people who appear to be gaming the state’s health insurance system by purchasing coverage only when they are sick quadrupled from 2006 to 2008, according to a long-awaited report released yesterday from the Massachusetts Division of Insurance… The number of people engaging in this phenomenon — dumping their coverage within six months — jumped from 3,508 in 2006, when the law was passed, to 17,177 in 2008, the most recent year for which data are available.
Full article on short-term insurance buyers in Massachusetts.
This shows how unsustainable the individual mandate really is. People will free ride (or pay the small fine), not enrolling in coverage until they become sick. Once someone needs care (maternity benefits for example), they will sign up for coverage. After receiving medical care, people will bail out of coverage — letting those who pay premiums bear the cost.
This is why an individual mandate is not a good idea unless waiting periods are allowed and premiums are adjusted for risk.
This is going to happen nationwide in four more years.
Makes perfect sense. Why buy health insurance until you need it?
Both Switzerland and the Netherlands have an individual mandates with over 98% compliance. This is another example of American Exceptionalism. Romney managed to institute an exceptionally poorly designed system.
artk: If you had a mandate in Minnesota, you would probably also get close to 98%. But that certainly would never happen in Texas, or California, or….
artk: I’m glad you said ‘American Exceptionalism’ and not ‘Massachusetts Exceptionalism.’ On the present course, the term will apply to the rest of the U.S. in a few years.
The number of people “gaming” the insurance system in Massachusetts goes to support why the country should consider moving to a universal health care system. If the coverage was already provided there would be no reason to game the system. Everyone working would be contributing because it would have to be funded through taxes. Working people are already funding the Medicaid program and the Massachusetts program through their taxes. Workers would no longer have the ever increasing health insurance premiums which could also off set an increase in taxes. Universal health coverage could allow people to receive preventative services and treatment for chronic conditions which would decrease lost productivity and continue to allow people to work and pay taxes. I know it’s not a perfect fix but something to consider.
Heather – is the system you propose managed centrally by HHS?