In Massachusetts, Insurance Mandate Stirs Some Dissent
BOSTON — Wayde Lodor is part of the 2 percent: the roughly 120,000 residents of Massachusetts who lack health insurance despite the state’s landmark 2006 law requiring almost every adult in the state to have it. He is likely to face a penalty this year, having made enough money under the state’s guidelines to afford a health plan. But Mr. Lodor, an independent product development consultant from Leominster, remains defiant.
“I’m in good shape, I don’t eat meat, I don’t drink excessively, I’ve never smoked,” said Mr. Lodor, 53, who estimates he would have to spend at least $1,200 a month to cover himself and his college-age daughter. “The last thing I’m going to do is not pay my rent because I have to pay for some state-mandated health coverage that I don’t think I need.”
As the Supreme Court hears arguments this week on the constitutionality of the national health care law and its requirement that most Americans be insured or pay a penalty, 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.
Massachusetts health officials say the shrinking number of violators is a sign that the law is succeeding. “I think the individual mandate in Massachusetts has been accepted by our population, understood, and broadly judged as fair,” said Glen Shor, executive director of the Massachusetts Health Connector, the state agency that helps residents find insurance coverage.
But for the relatively small universe of people who resist buying coverage, the mandate is a bitter pill. Teofilo Cuevas, 51, who earns about $40,000 a year as a meat cutter at a grocery store, said he had decided to drop his employer-provided coverage because even with insurance, he could not afford his out-of-pocket costs. He said he avoided going to the doctor.
“A lot of people cannot pay this,” Mr. Cuevas, an immigrant from the Dominican Republic, said through an interpreter.
For individuals facing penalties, who are often young, male and healthy, the state appears to have been generous in granting one-year waivers. From 2007 through 2010, the state approved 65 percent of the appeals filed by people who had been given penalties, or 7,163 out of 10,992, according to the Health Connector. State officials said appeals were granted based on proof of financial hardship, which might involve unemployment, a foreclosure or period of homelessness, or having to make the choice between paying for insurance or for heat and electricity.
"“Most people want to have coverage but they have to make dollars-and-cents decisions.”"
“It’s a very humane and fair appeals process that gives people the opportunity to tell their story in full,” Mr. Shor said.
But some small business owners also feel unfairly targeted by the law, which requires employers with the equivalent of 11 or more full-time employees to offer coverage or pay a penalty of $295 per employee. Mr. Cuevas’s employer, Ronn Garry Jr., owner of Tropical Foods, a grocery store in the Roxbury section of Boston, is facing nearly $30,000 in penalties because not enough of his 70 employees signed up for his employer-provided plan over an 18-month period, he said. “It’s frustrating,” Mr. Garry said of the law, “because I support it but I also feel victimized by it.”
He added, “Most people want to have coverage but they have to make dollars-and-cents decisions.”
Over all, 4.6 percent of the employers who are required to offer coverage, or about 1,000, were penalized for noncompliance in 2010, according to the state. The state’s Division of Unemployment Assistance enforces the rule; compliance improved to about 95 percent from about 88 percent from 2007 to 2010. Money from the penalties helps offset the cost of state-subsidized health insurance.
William Fields, a consultant in Boston who helps employers comply with the law, said restaurants and stores often struggled to avoid penalties, known in state parlance as “fair share contributions.”
“You have some of those who are truly bad guys and should be fined,” Mr. Fields said. “But the ones that are personal to me are the $50,000 fine that puts my client out of business.”
Robert J. Blendon, a professor of health policy at Harvard, said that while the individual mandate had more or less succeeded in Massachusetts, it would have a much harder road to acceptance in states where more of the population is uninsured. Even before the 2006 law, Massachusetts had more residents with health insurance than most other states.
“Everybody says, ‘Well if they’re happy with it here, won’t they be happy with it in Texas?’ ” Dr. Blendon said. “I don’t think you can get from one to the other because the numbers of uninsured are so much larger.”
Polls suggest that most people here like the state law, although fewer support the individual mandate specifically. A statewide poll last year by the Harvard School of Public Health and The Boston Globe found that 63 percent of residents supported the overall law, while 51 percent supported the individual mandate.
But while the Massachusetts law is popular for now — an effort to get a question on the ballot this fall asking voters to repeal the individual mandate failed to collect enough signatures — it could lose support if health care costs, already prohibitively expensive here, continue to rise. Gov. Deval Patrick, a Democrat, has called for reining in costs by changing the way doctors and hospitals are paid, but the legislature has not taken action.
Amy Whitcomb Slemmer, executive director of Health Care for All, an advocacy group here, said the federal health care law would help by extending subsidized coverage to some people who do not qualify for it under the Massachusetts law. Many such people, she said, are currently “right on the margin, trying to live with the mandate and it’s just a strain on their budget.”
Because it is not a federal statute, the Massachusetts law would survive even if the Supreme Court finds the national mandate unconstitutional. Nevertheless, Mr. Lodor said he was eager for the justices to strike the federal law down.
Mr. Lodor, who is divorced and pays for his daughter to be insured through a plan her college offers, acknowledged that he was “rolling the dice” by forgoing insurance. He is not against buying catastrophic coverage, he said, but that alone would not meet the state’s “minimum creditable coverage” requirement.
“I really feel strongly this isn’t something that should be foisted on me,” he said.