State experiences with insurance mandates offer cautionary tales

Mar 29 2012

In Massachusetts, reforms are proceeding with an individual mandate, while Washington state and New Jersey faced hardships when they overhauled their health insurance markets without one.  

The New York Times: In Massachusetts, Insurance Mandate Stirs Some Dissent
Massachusetts offers a real-world laboratory of how such a mandate might work. Roughly 48,000 people in the state were subject to penalties for not having coverage in 2009, the latest year for which figures are available, down from 67,000 in 2007. The maximum penalties range from $228 to $1,212 a year, depending largely on income. (Anyone with an annual income of less than 150% of the federal poverty line pays no penalty.) The penalties are paid on state tax returns (Goodnough, 3/27).

The Seattle Times: Washington's '93 Health Overhaul Faltered With Loss Of Mandates
[Some] remember 1993, when state lawmakers passed a comprehensive state law aimed at insuring everyone and spreading the health-care expenses of the sickest throughout a large pool of policyholders. But the law, which relied on both mandates and incentives, was soon dismembered, leaving only popular provisions, such as prohibiting insurers from denying coverage to sick people or making them wait many months for coverage. Without any leverage to bring healthy people onto insurance rolls, insurers, left with the priciest patients, began a financial death spiral (Ostrom, 3/27).

Earlier, related KHN coverage: The New Jersey Experience: Do Insurance Reforms Unravel Without An Individual Mandate? (Cohn, 3/20).

Meanwhile, a study explores the eventual reach of the federal mandate -

CQ HealthBeat: Study: Relatively Few Would Have To Buy Coverage Under Mandate
Relatively few Americans would be affected by what polls show is the most controversial part of the health law ... That's the finding of a new study by the Urban Institute, which estimates that just six percent of the U.S. population, 18 million people, would have to "newly purchase" coverage under the individual mandate provision of the health overhaul law. ... In most cases the government would provide some help for those needing insurance (Reichard, 3/27).

Also, media outlets in California wonder about consequences of the court's decision -

KQED's State of Health blog: What Impact Will the Court's Decision Have on California?
California was the first state to pass legislation to set up a health insurance exchange. The state also set up a new high risk pool so people with pre-existing conditions can get health insurance. But what happens if the Supreme Court declares the individual mandate unconstitutional? Or overturns the entire law? What can still go forward in California? The answer depends in part upon whom you ask. But for the most part California -; like all states -; will find it tough to move forward without the backing of the federal law (Aliferis, 3/27).

California Watch: For California, Supreme Court Health Reform Decisions Put Billions On Line
California already has begun to overhaul its Medi-Cal program in anticipation of the influx of new patients. The state is relying more heavily on managed care plans to reduce costs and provide comprehensive care. And the program is making changes with an eye on continual improvement, said Marian Mulkey, director of the Health Reform and Public Programs Initiative of the California HealthCare Foundation (Jewett, 3/28).