As far as how they approach their citizenry is concerned, these programs tend to fall into two main categories: (a) a mandatory universal model, or (b) an incentive-based persuasive one. In both cases, the state government plays at least some supporting role in the process; however, as we shall see, very few of these plans ultimately seek a willing clientele for their presentations. Herewith, a summary and basic analysis of the most prominent of the programs:

The Taxachusetts plan

Let's begin with the most coercive models, those being advanced in Massachusetts and California. In the Bay State, outgoing Governor Mitt Romney tried to launch his own quixotic Presidential campaign by pushing the legislature to create a system of compulsory health insurance. It imposes fines, on both employers who fail to get in line and individuals who refuse to obtain health insurance, seeking to force-feed its program on the Commonwealth's citizens. Meanwhile, as has been noted by several critics of the plan, it looks better on paper than in the real world.

For example, as Boston Globe columnist Eileen McNamara noted last month, "Nine months has been time enough to give birth to a new state bureaucracy but not nearly long enough to deliver affordable healthcare to the uninsured in Massachusetts." She points to the formation of the Commonwealth Health Insurance Connector Authority (CHICA), with its "22-person staff earning an average salary of $111,000 a year," while the most "affordable" individual healthcare premiums being offered under the new plans are in the range of $380 per month, "almost twice what Mitt Romney predicted the plans would cost before he set off on his delusional bid for the presidency, touting universal healthcare as the capstone of his career."

She states that CHICA has now asked insurers to resubmit their bids, but is skeptical, since the law includes "no mechanisms for cost-containment," nor any plan for upgrading the coverage on "the tens of thousands of people who now have bare-bones health insurance" beneath the new law's standards for "comprehensive coverage." Whatever the case, the board now has about one more month to define those standards, while by July 1, individuals must have insurance that measures up, or pay fines, "a policy that is supposed to promote individual responsibility but that will end up penalizing the working poor," McNamara predicts.

The solution nobody's considering, she concludes, is raising the penalty for employers who don't get into the health insurance market, to fund those who cannot otherwise afford coverage themselves. Given that the Bush plan, like other societal trends, is mitigating against further employer-paid healthcare, this may not fly very far. However, McNamara correctly notes that the low penalties now in place ($295 a year, per person not being covered, for companies with 50 or more employees) are hardly strong enough to promote compliance. Additionally, the fines for individual non-compliance (about $200 as presently conceived, imposed as a penalty against state tax-refunds) pale in comparison to paying almost double that per month for insurance coverage.

Meanwhile, according to another Globe story, the new minimum requirements could force about 200,000 Massachusetts residents who already have some level of health insurance to raise their levels of coverage, or face the same fines and penalties. The article quotes Richard Lord, president of Associated Industries of Massachusetts and a Connector-board member, as calling this "very troubling," and noting that "The new law was about expanding access for people without any health insurance. I don't think we should be forcing people who do have some coverage to spend more."

The story also notes limits on out-of-pocket expenses under the board's proposes standards: $5,000 for an individual and $10,000 for a family. Deductibles would also be limited, to no higher than $2,000 per individual and $4,000 per family, with a waiver on generic drug payments and up to three medical visits per person, before the deductible would kick in. (This low limit on the deductible-level could be the very worst part of the Bay State's plan. Stay tuned.)

The California dreamers

So much for Massachusetts; how about the other end of the blue-state reform effort, out in California? Dubbed "Ahnoldcare" by its critics, the Golden State's healthcare plan is also being called "Massachusetts on Steroids." With its focus on mandates and penalties for non-compliance, it does indeed appear very similar in intention. One of the better analyses of the plan comes from Reason magazine's Ronald Bailey, who asks Ready for Ahnoldcare?, calling it "Not individual and not responsible." Although he notes the claims by its adherents that the plan encourages individual responsibility, Bailey debunks these contentions, noting that the core of the program is merely an expansion of the current Medi-Cal welfare medical payment system, with the addition of "new taxes on employers, doctors and hospitals to pay for additional subsidies. Instead of helping Californians to become more responsible for their own health care, it makes more of them wards of the state."

Bailey wastes little time dissecting the shortcomings of Ahnoldcare, focusing instead on advocating what he terms "the governor's original insight." He notes that insurance is not supposed to be a catchall for every eventuality, but "should cover low-probability, high-cost events, not routine maintenance." (See my recent column elsewhere for a consideration of this issue in more detail, spurred by the Cato Institute's Arnold Kling's own dissection of the "insurance vs. insulation" issue.)

Bailey does commend the Schwarzenegger plan for defining the "minimum" policy as "a $5,000 deductible plan with maximum out-of-pocket limits of $7,500 per person and $10,000 per family." (Unlike the Mass. plan, this confronts a little bit of reality.) Such a plan, for the vast majority of people, could be purchased for about $100 a month per individual. In fact, doing his own due diligence, Bailey finds several such individual plans for a 45-year-old male like himself, with premiums ranging from $92 to $111 a month. Exploring family plans, he finds them at between $250 and $350 a month, with caps on out-of-pocket totals and virtually no ceilings on coverage amounts. "Clearly the governor knows what he is talking about," he concludes.

However, the problem, Bailey asserts, is the attempt to balance family budgets on the backs of California employers, by raising taxes to fund the program. Instead, he says, "the governor should be at the forefront of trying to free Californians from the shackles of employer provided health insurance. Employers do not buy homeowners, life, or auto insurance for their employees, why should they buy their health insurance? And if you lose your job, you don't lose your car insurance or your homeowner's insurance. Why should you lose your health insurance?" He notes that the only reason this system has perpetuated itself in so prevailing a manner, is because of the federal tax system, which rewards employer plans and penalizes individual ones. (Note that Bailey's column was written only a week or so before President Bush's State of the Union message, advocating just this approach as part of his own program.)

Meanwhile, with the governor's low-income plan, Californians below the poverty line would be enrolled in Medi-Cal and similar subsidized variations. Instead, Bailey suggests offering those poorest citizens direct vouchers, with which they might purchase their own chosen levels of insurance. He notes that Medi-Cal's expenditures in 2005, $34 billion, went to provide for about 10 million Californians, an average of about $3400 per person, easily enough for a family of four to not only buy health insurance, but set aside another ten grand to handle the deductibles. Eliminating the bureaucracy, and the excess paperwork, would clearly make this feasible.

Bailey isn't the only critic of "AhnoldCare." For example, writing in the Los Angeles Times, California Nurses Association executive director Rose Ann DeMoro predicts that, rather than solving the state's healthcare problems, the governor's plan "may well exacerbate the crisis and simply prolong the disgrace." Her own prescription is, of course, the same old song: "some form of a national health care program or single-payer system, the course taken by every other industrialized country." (Although this statement ignores the fact that none of those "industrialized" countries have as yet figured out how to provide such unlimited services – without severe rationing, extensive waiting-periods for the most critical procedures and massive exoduses of their citizenry to this country for necessary treatment – her other criticisms of the Schwarzenegger plan are nevertheless valid.)

DeMoro begins by attacking the combination of forced mandates, state subsidies and tax penalties in the governor's plans. "All the components have a common theme: reinforcement and expansion of the role of the market in health care, the very same market that created the current mess by placing the pursuit of increased revenues and profits ahead of increased access, affordable care and enhanced quality." Although (like most commentators, both left and right) she misuses the term "market" in describing the corporate-oligarchy basis of all such plans, she correctly targets the prime beneficiary of the plan: the insurance industry: "Nothing better symbolizes the ascendancy of the market than the mandate on individuals to buy insurance," she declares. "It stands the central premise of health care on its head – to help people, not to criminalize them."

She also notes how "the Schwarzenegger plan goes beyond Massachusetts, which simply sets tax penalties, by proposing that health insurance become a pre-requisite to getting a job or enrolling your children in school." The individual mandates, she notes, "shift all the risk from insurers or government onto the back of individuals," while neither state's plans place any limits on premiums or standards, "to assure the plans have comprehensive or uniform benefits." DeMoro points to the "neoconservative political ideology" (mislabeling again, nothing 'neocon' about it …), which holds that "individuals are solely responsible for their health status, ignoring corporate and commercial factors, from cancer-causing pollution to contaminated agriculture to fast food."

DeMoro also decries one of the really positive aspects of AhnoldCare from a libertarian view – the encouraging of Health Savings Accounts, which she calls "a side product of the Bush administration's 2003 Medicare drug benefit fiasco." She thus misses the basic concept that – after setting up such an HSA, and purchasing low-premium, high-deductible insurance coverage – one might then choose to pay the lower premiums, take more self-responsibility, limit doctor visits to the essentials of wellness … and end up with something left in the cookie-jar at the end of the year, to carry along for the next one!)

A free-market critique

Another voice, addressing both state's proposals, comes from the Pacific Research Institute's Sally C. Pipes, noting in USA Today that "Both plans go too far. Government meddling can't fix this." Pipes, president and CEO of that public policy thinktank, cites the clear message both California and Massachusetts are sending with their proposals: forcing people to buy health insurance is considered a small price to pay for better healthcare.

However, she declares, "Forcing people to buy health insurance will not solve the problem of the uninsured, make America healthier or decrease the amount of money we spend on health care. Such schemes will increase taxes, kill jobs and destroy private health care markets. They are also the next logical step on the path to single-payer health care." She also notes (in the face of Schwarzenegger's claim that "Everyone in California must have health insurance."), "This is already true for automobile insurance, yet up to 25% of the state's residents leave home without it."

As for Massachusetts, she points to the fact that thus far "only four in 10 of those eligible for the totally free Commonwealth Care have signed up." Moreover, she notes, "Premiums for the subsidized plans are set as high as 6% of the insured's income, prompting talk of not enforcing the individual mandate." Meanwhile, both state plans involve "massive cost shifts," she declares:

"In Massachusetts, federal taxpayer money will be shifted to providers. In California, the governor calls for an increase in rates for providers from government insurance and then taxes some of this back with new taxes on physicians and hospitals. This is simply a way to increase taxes on private plans and send the money to government plans."

Any other bright ideas?

Are there any state healthcare programs in process that take a different approach? For the most part, the answer is NO! Oregon's response's is similar to California's (with the added intention of attracting more healthcare professionals to the state, to meet a perceived shortage). In each case the focus is on "insuring everyone," and mandating "compliance " (from employers as well as individuals), rather than on promoting low-cost alternatives and letting people's own good sense and self-interest lead them to better health overall.

They also all tend to seek to convince everyone to sign up, as employer and as individual, choosing among the options they (and the insurance companies) have devised for allegedly "necessary" healthcare coverage; meanwhile, in some way or another, they seek to penalize members at least one of those categories if they do not obey. (It may be significant that Oregon's Public Employees' Benefit Program both offers and encourages the use of Healthcare Flexible Spending Accounts.)

Vermont's answer is pretty much that of Massachusetts; following the lead of its neighbor to the immediate south, the Green Mountain State's plan is focused on REQUIRING everyone to get insured. Somehow it's not all that surprising that a state that prides itself on having self-defined socialist Bernie Sanders as its "Independent" Congressman (now Senator) would take that route of forcing compliance rather than offering incentives for it. The good news is, unlike its sister to south, Vermont is at least offering some low-rate, bare-bones programs to choose among, through its Catamount Health insurance plans through private insurers, designed to attract those individual subscribers, and focusing on preventive care and early detection.

In the neighboring state of Maine DirigoChoice offers healthcare coverage for small businesses (50 or fewer employees) and the self-employed at affordable rates. Instead of subsidizing the premiums directly, the plan offers discounts on payments, deductible reductions and other benefits, based on income and family size. However, the plan still focuses on setting a rate and then making piecemeal payments back to individuals, rather than creating a bottom-dollar basic insurance program, and then just paying a piece of it across the board. This would seem to encourage abuse, just as all the other programs do, and shows little likelihood of containing the actual insurance costs themselves, which are frankly a large part of the mess as it now exists. The positives of the plan include the fact that it is voluntary, and hopes to attract its subscribers, rather than compelling their compliance.

And more recently, another New England neighbor, tiny Rhode Island, has also taken some rickety steps into the future. According to a Heartland Institute article, reprinted from the Providence Journal, the state initiated a plan in December that would at least lower some of the costs of healthcare for its citizens. The plan, to begin in May, involves both Blue Cross & Blue Shield of Rhode Island and UnitedHealthcare of New England, which must offer "wellness health benefit plans" to all individuals, as well as to businesses with 50 or fewer employees. Coverage would cost about $300 a month for an individual – hardly a bargain, but marginally affordable compared to many existing plans.

Their method for cost-containment is a focus on "keeping people healthy and steering patients toward selected providers who meet quality and efficiency standards." The piece quotes Gov. Donald Carcieri as declaring that, "We, as individuals, need to take more responsibility for our health care and manage our lifestyle. That's what will slow down, long term, the cost of health care." Deductibles in the new plan would be about $500, with a cap on out-of-pocket costs of $3,000, and the provision that certain "healthy behaviors" (exercise, dietary sanity, etc.) would be undertaken by the policyholder. Critics, including the state's own Medical Society, say the program is more advisory than enforceable, and will not work as presently constituted.

* * *

Other states have also attempted to address this problem, with similar tactics based on the "you will eat what we put before you, and you will LIKE it!" paradigm. The question remains: Does anyone have an answer that truly steps to a different drummer? In the next installment of this series, we'll look at a rather different approach to a state-administered healthcare plan, one that takes a decidedly radical approach to the problem: Tennessee's prescription for its recovery from the horrors of TennCare, the Cover Tennessee programs.