State Bill Pushes Mandatory Health Insurance

By Mike Bevel, CollectionIndustry.com

Massachusetts approved a bill Tuesday requiring all residents of the state to purchase health insurance. Using the car insurance industry as a model, Republican Governor Mitt Romney sees the bill as an opportunity to address the half million Massachusetts residents who go without insurance. “We insist that everybody who drives a car has insurance. And cars are a lot less expensive than people,” Romney said.

The bill made it safely through both the House and Senate ? and it’s a completely different way of dealing with health care in this country.

Many, like professor of economics and public affairs Uwe E. Reinhardt of Princeton University, see the current system of allowing uninsured citizens to receive medical care on the government’s dime as nothing more than a “freedom to mooch.” Under the Massachusetts plan, residents would be required to be enrolled in some insurance plan or other by July 1, 2007. For those who fall at or below the poverty level, sliding scale options would be available. As of press time, exactly how much low-income residents would be required to pay had not been settled on.

Once the program is in full-swing, Massachusetts residents will be required to provide their insurance information on their 2008 income tax returns. Those without will suffer financial consequences, starting with the loss of their personal state tax exemption and building up to half the cost of the cheapest policy they should have purchased.

The plan, while bold in its intentions, feels a little under-thought. Compulsory healthcare may have unintended consequences for transient and low-income patients who are unable to find insurance, even with a sliding scale in place. It?s possible many would forgo treatment rather than risk financial and legal penalties. It also puts government in the position of policing health care; and many are uncomfortable with that level of governmental involvement.

This push towards universal health care in Massachusetts could also have consequences for the medical collections industry. With all health care covered through mandatory insurance and governmental subsidies, it remains to be seen how this will play out in the collections industry.

Governor Romney is considering a presidential bid in 2008. If the program is a success in Massachusetts, it could prove an interesting platform for his campaign.