Today, residents of Massachusetts must purchase health insurance that meets 43 different requirements, such as limiting prescription drug co-pays to $250 per year and all deductibles to $2,000 per year per individual. A lot of 80/20 plans (in which the insurance covers 80% of the cost, the patient covers 20%, and out of pocket maximums are in the range of several thousand dollars per year) do not meet “minimum credible coverage” guidelines.
As I’ve been saying for a year, the requirement in Massachusetts is not “buy insurance or pay a fine.” It’s “buy really expensive insurance, loaded up with things you may not need nor care about, or pay a fine – even if you have pretty decent health insurance.”
As Amit Roy explains in Forbes, this is not what Gov. Romney envisioned nor passed into law. Romney’s initial plan was to have people carry catastrophic health insurance (or a bond for the same), covering everything over $10,000, which would offset the free-rider problem arising from EMLATA. (It also has the nice effect of ensuring that almost no one will declare bankruptcy over medical expenses, because very few people declare bankruptcy over four figures of debt.)
Gov. Romney’s mistake was to leave the details of “minimum credible coverage” to an administrative agency (the Health Connector board), rather than to sign a bill into law that explicitly states what qualifies as credible coverage. There is always a danger that a law will be amended over time, with new goodies given out to voters at the expense of someone else – even the voters themselves – but such amending is done in the full light of day, by state representatives who may be telephoned, petitioned, lobbied, or voted out of office.