Health Care and Housing in MA

Health Plans in MA which meet the requirements of Obamacare cost about $14,000 a year for two adults in their early 40s and early 50s with one 6 year old child (see https://www.mahix.org/individual). Most people get the taxpayers to cover a portion of these costs but nevertheless WHY do these plans cost so much?

AND on top of it these plans don’t cover much. They basically pay for you to see a primary care doctor and get a mammogram once a year,  plus get a colonoscopy every 10 years but for pretty much everything else including the medications your doctor prescribes you have to pay. As a family of 3 you can be on the hook for up to $18,200 in out-of-pocket costs EACH year.

So EACH year in MA a family of 3 and the taxpayers pay between $14,000 if that family is 100% healthy and takes no medications and $32,200 ($14,000 for the premiums plus $18,200 max out of pocket) if the family is not healthy!!! That’s more than for rent!!! The more the family earns the more they pay of this cost which creates a perverse incentive to stay home and earn less. Plus if they make the heart-wrenching choice not to have health insurance they are fined by this state (only 3 other states still do that!!!) up to $4,000 each year. All of this is a big drag on business costs and it increases costs and prices for business’ products including rental prices. Yes, I know it’s a shock to some people to hear but higher landlord expenses lead to higher rents. As a lifelong Democrat I don’t have a problem with having an Individual Mandate as long as it’s nationwide. I understand that Obamacare was basically a compromise with the Health Insurance Companies – “if you drop the pre-existing conditions requirement, we’ll force the young and healthy to become your customers so that you are not burdened with the old and sick exclusively”. That was done with the hope that premiums will fall and more people will have insurance. But Republicans managed to remove the nationwide requirement to pay a tax penalty if you choose not to buy Obamacare, the so called Individual Mandate, and so it no longer makes sense for only several states to have that. What happens is – the young and healthy workforce, if they don’t want to have health insurance, they just move to another state rather than pay this ridiculous $4000 fee because they look at it as a state theft as this point. It’s called math. 

So my legitimate question to the legislators is this: “What’s the reason you cannot create a system similar to the one in Europe and Canada where people pay a health care tax deduction from their paychecks and they can see the doctors and have the medications they need?” I constantly hear the argument “well, they wait for months to see a specialist”. What, and we don’t wait for months with the system we have here? Plus I hear “oh, those Europeans are paying huge taxes”. Sure, but it’s certainly less than $14,000 to $32,200 a year.

At least on a federal level the Democrats have an excuse that people keep electing too many Republicans who block any efforts to have Medicare for All or a similar program but what’s your excuse in MA where Democrats control all three branches of Government? By the way, I mentioned Medicare, my mother is on Medicare and had to have two heart valves replaced and that life-saving operation was fully covered by Medicare. It’s a good thing Medicare exists. It needs to be expanded.  

All of this leads me to another curious oddity – Health Care and Housing are similarly important and literally vital, right? In fact some would argue they are both a human right. And both of them are controlled by businesses – in the case of health care – the insurance companies and in the case of housing – the landlords.

But what’s interesting is that in the case of health care the state’s decision was NOT to “cap” the prices of insurance premiums. I don’t hear any talk about “premium control” ballot initiatives or legislation but instead to go the other way and to subsidize the premiums – the less you make the more you’ll receive as a subsidy from the state but interestingly in the case of housing the dominant drumbeat is “rent control” and less and less subsidies like Section 8. But if we follow the same model as health care then rents should not be capped but instead every tenant should automatically get Section 8 or a similar state program – the less they make the more they should receive as a subsidy. After all that’s exactly what we are doing with Health Care in MA. Is this because insurance companies pay for lobbyists and landlords do not?

But even though Health Care and Housing are very similar because they are vital to the human existence, there is at least one important difference between them. In the case of Health Care the insurance companies are basically a middleman and we don’t really need middlemen while landlords are not middlemen because they sell their product directly to the public.

While in some cases subsidizing is the right thing to do when, for example, you want to encourage a new industry to bloom, in most cases I am not a fan of subsidizing. Encouraging healthy competition is better.

In the case of Health Care we don’t need middlemen, the only middleman we need is our own Government created by us mandating that all health providers (hospitals, clinics, dentists, doctors, etc) must share their prices with us which will be organized in a Searchable Database on Mass.gov so the consumer can sort by price. This alone will bring hospital and dental procedures prices down substantially when there is public transparency of health care prices. All you have to do it bring the printout of the procedure and price listed on Mass.gov and the provider will be forced to honor it, that way it will be in their interest to report current prices to mass.gov. The State needs to develop a spreadsheet of standard medical and dental procedures and list the prices of all health care providers for those procedures. Every time there is a change in price the providers must report it to Mass.gov. There are huge differences in prices for the same procedure even among hospitals in the same city because the health care industry is the only industry in America where the prices are secret. This is not a joke. You buy a product first and then you are told the price sometimes months later. It should be before you buy the cheese you need to see the price and decide in advance if you can afford imported cheese or domestic.

And by the way, merely requiring that providers list their prices on theirs web site is not enough because they come up with all kinds of loopholes (like requiring the public to give them a CPT code before they provide a quote) and listing all kinds of extra medical procedures an sub-procedures and using abbreviations that no one else understands so that they can intentionally confuse the public and prevent it from comparing apples to apples. Plus we need the prices on Mass.gov to compare all providers in the state not the internal prices of providers one by one. We don’t need estimates. We need firm prices and quotes. But they don’t even follow their own “estimates”. One hospital estimate to see a doctor for a first time was listed as $200, months later they billed me for close to $500. There should be consequences for false advertising and deviating from the prices reported to the state database. 

Before you rent an apartment you know the rent and you can sort and compare on Zillow, Apartments.com and Craigslist, etc. The consumer should be allowed to search by price. As far as Housing,  as we have said many times before, the solution is encouraging more competition in the form of new construction, relaxing some regulation and zoning. Competition brings rents down. Capping prices is like Drug and Alcohol Prohibition – it doesn’t work. It’s interesting that the politicians seem to know this lesson when it comes to insurance premiums but not when it comes to rents. And by the way subsidizing like this doesn’t work either. It’s just treating the symptoms in the most expensive way without curing the root issues. 

We are not asking the Government to set prices, cap prices, subsidize prices or otherwise interfere with the prices of the health care markets. All we are asking is that the Government finds out what the prices are and lists them in a database by procedure and provider so that the public can search and find the low cost providers and make an informed and transparent decision on who they want to hire for a particular medical procedure. 

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