Health Care Experiments

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The DLC just sent out an email highlighting some of the recent healthcare initiatives being proposed in Montana, the sort of thing that could possibly serve as a model for the nation at large:

Montana’s new small-business program… will provide direct financial assistance for health care insurance premiums to offset the high insurance costs facing smaller businesses and the large number of low-wage workers in smaller firms. The assistance will be targeted at very small businesses (under 10 employees) and will be more generous for low to moderate-income employees.

These businesses will be able to purchase the coverage through a purchasing pool that can negotiate a lower price with insurance companies, a proposal advanced by Governor Brian Schweitzer. Insurance companies may be willing to offer a lower price because the premium assistance will make coverage affordable to most employees, and in turn, will help solve one big problem in today’s small group insurance market: the tendency of small businesses to buy insurance when they have workers who are sicker and need the coverage. Insurance companies charge extra when they are likely to enroll sicker workers….

In Montana’s purchasing pool, employees and dependents who are eligible for Medicaid or the Children’s Health Insurance Program will be automatically enrolled as part of their job-based coverage in order to maximize federally matched funding.

Finally, Montana will offer a tax credit to small businesses who currently provide coverage but who are struggling to afford it. This tax credit will send those businesses an important message to keep up the good work.

Now I have doubts that some of these proposals will work, especially that purchasing pool. (Studies have shown that similar programs, known as Association Health Plans, either have a very small impact on covering the uninsured or, paradoxically, increase the number of uninsured. Read this for the gory details.) Nevertheless, this is precisely the sort of thing that should be tried out on a state level, to see what works and what doesn’t, so that when this current batch of Republicans get kicked out of office and we can finally get serious about health care reform, we have some models to examine. Another “laboratory of health care” to watch will be Gov. Christina Gregoire’s proposal in Washington to restrain costs by eliminating waste. Again, I’m skeptical that in practice you can really eke that many health savings out of “information technology,” but why not give it a shot?

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