Friday, April 9, 2010

You MUST Buy Health Insurance--Corporations Need Your Money!

I've been sharing the Massachusetts experience with mandatory health insurance with my readers, so you can know what to expect from the federal plan that's modeled on Massachusetts. Expect Robin Hood in reverse: a big subsidy by the working poor and middle to the richest of the health care providers. I originally published this piece last summer.

Massachusetts requires all residents to buy health insurance, even if it means coverage without care. Buying a health plan with a high deductible means paying for nothing, which is what thousands of Massachusetts residents are doing. But it's worse than that.

It turns out that our state government forced struggling young people and families into the insurance business partly so that hospitals didn't have to give them free care any more. "Today, hospitals typically spend about 1 percent of expenses on free medical care, as measured by the attorney general, half of what they spent before reform made insurance available to many more low-income people," according to the Boston Globe.

Meanwhile, nonprofit hospitals are making a profit out of their tax-exempt status--an exemption granted to them largely so that they could offer free care!

The 10 leading hospital companies benefited from an estimated $638 million in federal, state, and local tax breaks as well as state discounts on borrowing in 2007, the latest year for which complete data are available. More than half of that goes to two large and growing companies, Partners and Children's Hospital. Overall, the 10 hospital companies' tax breaks and other benefits were worth $264 million more than the value of the "community benefits" - care for the poor and other charity work - they reported to the state attorney general that year.
It's important to mention the hospitals that ARE offering a lot of free care: "Three companies - Tufts Medical Center, UMass Memorial Health Care (owner of UMass Memorial Medical Center in Worcester) and Boston Medical Center - reported spending more on community benefits than the value of their tax breaks as estimated by the Globe." But they are the shining exceptions--and Boston Medical Center is having severe financial troubles because of its commitment to serving the poor.

In short, so-called nonprofits like MGH and Children's Hospital are stiffing the poor, and we are giving them a tax break at the same time. This should be the shame of Massachusetts.

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