Many years ago I was stopped for speeding in Montana – specifically doing 90 in a 55 mph zone. The fine was $5 and was paid on the spot. The officer wished me a nice day, and off I went at 90+. It looks like Massachusetts may have learned from the Big Sky state, at least when it comes to setting penalties for politically unpopular laws.
Yes, the new Massachusetts universal coverage law requires most employers provide employees with health coverage, but the penalty of $295 per employee for non-compliance is somewhat of a joke. With health insurance costs per employee in the $5000 plus range, the penalty amounts to a 6% fine for noncompliance.
Not exactly a strong message…
Meanwhile, the state’s law may well be challenged by corporations under ERISA…a nod to Paul Secunda for his interpretation of the situation and to John Rodat of SignalHealth for the heads up.

Pretty much everyone would agree that when it comes to information about physician practice patterns, outcomes, and costs, the more the public knows, the better. And the staunchest supporters of consumerism are the most ardent advocates of full disclosure of publishing health care provider data. Why just this week Pres. Bush was in Connecticut stumping for his various solutions to the nation’s health care crisis, proclaiming the benefits of information in driving down costs and improving outcomes.
No big news here.
Except that Medicare provider data, the nation’s largest database of provider-specific information, encompassing over a billion claims per year, with information on practice patterns on the vast majority of physicians in the US, and under the direct control of the Federal government (and therefore by Mr. Bush) has not been released to the public. Or anyone else, for that matter.
What’s going on? Well, the Feds claim that the data is private, is covered under a 1979 law prohibiting disclosure of individuals’ data, and therefore cannot be released. This is somewhat confusing, as most physicians practice in professional corporations (that’s the significance of the “P.C.” you see after the name of the doc or medical group) and therefore are not covered by the law.
I’ll admit to a bit of cognitive dissonance here. Are these are the same Feds that can unilaterally release confidential information about national security issues; use Executive Findings to claim exemption from Acts of Congress; the Feds that are of the same party that controls both Houses of Congress and therefore might have some say in what new legislation is passed; the Feds in control of the Attorney General’s office with all its resources, which has demonstrated its willingness to prepare legal documents authorizing all manner of actions?
Given the aggressive position of the Administration on other issues, its willingness to take steps that are bold and controversial on other matters, I’m really surprised that they have been so, well, wimpy on disclosure of Medicare data.
What does this mean for you?
Likely frustration, regardless of your opinion on consumerism in health care.

Sally Pipes is a think-tank leader out on the west coast who appears to be a “free-market-as-cure-for-healthcare’s-ills” advocate. Her latest effort appeared in USAToday earlier this week, wherein Ms Pipes reveals her belief that Massachusetts’ health plan legislation is a thinly-veiled attempt to force the state into a single-payor solution.
While the entire editorial is, well, interesting, one of the most bizarre statements in her editorial is this –
“Individual health insurance is not always a good deal in Massachusetts, thanks to state-imposed community rating regulations that require companies to charge the sick and healthy the same rates.”
Uh, that’s kind of the point of insurance – everyone pools their funds to pay for the claims of the few with high expenses. If you don’t do that, you have what is known as pay-as-you go. And that’s not insurance. But for some reason Ms. Pipes thinks that’s bad.
Wait, there’s more.
Ms. Pipes then says that the Mass plan will saddle the state with the “same health plan design (that is) threatening General Motors Corp.’s viability and bankrupted its suppliers.”
Oh jeez, that’s about eight errors in less than one sentence.
Health plan design is not the main problem at GM – lousy cars, poor union negotiation tactics, aging plants, high gas prices, and bad management are GM’s biggest problems. And health care. But GM’s health care plans are WAY different from the new plan in MA. And cost-shifting from the uninsured, an aging population, too many retirees, inadequate cost controls, and lack of effective disease management are the biggest problems with GM’s health care program.
Here’s the silver lining – Ms. Pipes went on to say “The legislation will not control the true costs of these plans.” That’s absolutely true, and she is right on point, and I agree.
It’s great to find common ground.

Bob Laszewski is one of the most insightful observers of health policy matters inside the Beltway, and his recent comments on Enzi’s proposed AHP legislation continue that record. Bob has noted that the bill now before Congress is a far cry from the original AHP legislation, and has potentially far-reaching consequences for the health insurance industry.
AHPs were health insurance plans set up by trade associations who used them to generate fat commissions. Back in the eighties and early nineties, trade association members signed up for these programs in large numbers. While they did not have much in the way of managed care or “cost containment”, many AHP type programs thrived even after the initial entry of managed care programs into the market, on the basis of their ability to select the best risks and price accordingly.
As HMOs and health plans became more sophisticated, the AHPs’ advantages in these areas declined significantly, and their cost management capabilities were overmatched by those of the managed care experts in HMOs and larger health plans. Faced with very tough competition, AHPs all but died out in the late nineties.
For those that can afford them, small employers’ helath insurance costs are significantly higher than their larger competitors’. This additional cost is in large part due to higher administrative expenses; fewer premium dollars go to pay health care costs because it costs more on a per-person basis to bill premiums, issue cards, set up computer systems, track elgibility, etc. This differential has led Sen. Enzi, at the behest of the Chamber of Commerce, NFIB and others, to try to come up with a way to make insurance “affordable” for the small employer.
Enter the Enzi bill, titled, with much editorial license the “Health Insurance Marketplace Modernization and Affordability Act”. A product of the “sausage-making” that is our legislative process, the bill seeks to eliminate most state mandates, thereby allowing both insurance companies and associations to offer stripped-down plans.
While that sounds great, the likely effect of the bill, if it is passed, will be to allow insurers to do a much more effective job of risk selection, thereby avoiding the less healthy (i.e. more costly) people. I’m not blaming the insurance companies; insurance is about avoiding avoidable risk.
What Enzi’s bill will not do is make health care more affordable for small businesses. It will certainly make insurance more affordable for some businesses – those with healthier employees and lower risks. The rest will be even worse off than they are today.
What does this mean for you?
More health policy by folks without any health policy expertise equals no solutions to our health care cost problems.