Define "Affordable"
- Define "Affordable"
One of our sons owns a T-shirt with a typically adolescent inscription: "Define 'Girlfriend'." It rarely fails to generate a few wry smiles from passersby. We can imagine a similar garment, "Define 'Affordable'," selling well in Massachusetts, especially among bartenders in Boston, self-employed consultants, and small-town shop clerks as they confront the Massachusetts mandate to purchase health insurance so long as affordable, adequate insurance is available. Massachusetts should be commended for passing legislation that aims to achieve near-universal access to health care for its residents. It's a striking and difficult political accomplishment. Suggesting any remedy for the broken U.S. health "system" invariably exposes politicians to criticism. Employer mandate? Anti-business. Government-run program? Too many taxes, too much bureaucracy (as if health insurers lack it). Individual mandate? Undermines liberty, unfair to the little guy. Unable to decide the best way to reform the system, our elected representatives decide not to decide, and we live with an unjust, inefficient, and arguably unsustainable hodgepodge. Underlying these criticisms lie important questions about justice—and particularly about who benefits and who bears the burdens.
The Massachusetts act leaves much to be settled later. It requires individuals to purchase health insurance if an "affordable" plan is available, but details about what counts as affordable, what state subsidies will be provided, and what counts as adequate insurance (termed "creditable coverage" in the act) are the domain of the Connector board created by the act.
In the Eye of the Beholder
The most obvious contributor to affordability is the premium, but many other health-related expenses must also be weighed. If the only insurance available for, say, $600 per family per month (less expensive than any plan now available in Massachusetts) includes high deductibles, user fees, or both, the premium might be affordable but health care would not be.
In Massachusetts today, a family of four with forty-something parents, no health problems, and an income of $60,000 from two jobs spends $11,000 or more per year for a health plan with a $5,000 annual deductible per individual and $10,000 per family, and no coverage for prescription medication. 1 A family like this will avoid seeking any care they think they can defer unless they have reached their deductible, in which case they will rush to fit in all the care they think they might need before the end of the year. Since they can already receive treatment for emergencies (thanks to federal law), the plan gives them only marginally better access to care.
The plan may also not help financially. Once someone in the family develops a chronic condition like diabetes, the family faces additional expenses of about $346 per month,2 not counting lost income, additional household expenses, or any other health care costs. If one of the children develops appendicitis, the family will probably reach their two-person deductible of $10,000, for total premium-plus-deductible costs of $21,000—about 40 percent of their after-tax income. How affordable is that? No wonder medical bills are the number one cause of personal bankrupty.
A number of other considerations contribute to affordability as well. The act takes income and family size into account when defining affordability and establishing levels of subsidies, but the lack of specificity makes judging the equity and adequacy of this provision impossible. The act also does not specify whether the Connector will consider health-related expenses when determining criteria for subsidies and affordability, although doing so could make a dramatic difference. Clearly our family of four had much more "affordable" health care when they were healthy than after they began paying for diabetes-related care. Although it is not commonly thought of as a "catastrophic" event, diabetes, like other chronic conditions, can have a catastrophic impact on family finances. Patients with more than one condition—so-called "high users"—who have high deductible plans and high copayments face chronically high health-related expenses, and probably higher premiums under Massachusetts' reforms, since healthy young adults can find insurance packages designed and priced specifically for them.
