NCPA - National Center for Policy Analysis


April 6, 2006

A plan introduced this week in the Massachusetts state legislature would impose tax penalties, expand government-insurance programs and impose unfunded mandates to achieve universal health coverage, says the Washington Times.

Although Gov. Mitt Romney (R) had a dream of universal consumer-driven health care, this bill isn't "consumer-driven" at all, says the Times. It relies on third-party payers and employers and existing government-insurance programs. Furthermore:

  • The plan would impose "fees" -- actually, giving up existing tax breaks -- in the amount of $295 (per employee) for employers and $150 for individuals who fail to comply.
  • Companies that employ insurance-less "free riders" who run up big hospital bills must pay anywhere between 10 percent and 100 percent of bills over $50,000.
  • These fees -- sure to make people and employers take the law seriously -- will distort the state's economy and do little or nothing to harness market forces, says the Times.

Equally bad, it imposes an unfunded mandate. One health specialist speaking to the Wall Street Journal predicted that the plan would require a subsidy of about $700 million -- about four times what the plan provides.

According to Regina Herzlinger, a professor at the Harvard Business School and a fellow at the Manhattan Institute:

  • The plan will hurt businesses, especially small ones; it will force employers to favor capital improvements over labor, and compel outsourcing of jobs overseas.
  • In Hawaii, a similar plan applying only to full- or near-full-time workers set off a proliferation of part-time vs. full-time jobs.

Source: Editorial, "Big health in Massachusetts," Washington Times, April 6, 2006.


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