Would Plan Work for

Leaders can act or stand by as more residents lose their health coverage

S.C.?

As of the end of 2005, more South Carolinians than ever before, 16.3 percent of our population, lacked health insurance coverage, the U.S. Census reported last week. That's 1.7 percent higher than two years ago, meaning - in human terms - that thousands more South Carolinians either lost their health coverage or have no immediate hope of getting coverage.

We write about this problem every September - the time of year when the Census reports on health coverage. In years past, we have concluded, somewhat lamely, that absent congressional action to reshape the national health care market, there's little the state can do to attack this problem.

This year is different. In April, Massachusetts mandated that every resident have health coverage. Miraculously for such a liberal state, legislators and conservative Republican Gov. Mitt Romney hammered out a compromise coverage plan that redistributes the money that public and private insurance plans were spending statewide - without increasing taxes. Independent analyses of the plan have deemed it financially sound for at least three years.

But the plan does does reshape the state's insurance market with mandates. For instance, every resident is required to buy health insurance by next July 1, and businesses with more than 10 employees must either line up group coverage for employees or put in up to $295 per employee for health insurance. The state also sets up a health insurance connector from which Massachusetts workers can buy low-cost health coverage with pre-tax dollars.

Using its state and federal Medicaid payments, Massachusetts subsidizes health-insurance purchases, on a sliding scale, for residents who earn up to 300 percent of the federal poverty line. This key provision makes certain that the group least likely to have health coverage, the working poor, gets regular care. The state set up a safety net pool for people who can't afford insurance at any price.

Would such a plan work for South Carolina? Maybe, maybe not. Massachusetts has a reasonably easy time cobbling its plan together because only about 10 percent of its residents lacked health coverage. Our percentage of uninsured is more than half again as high. Among other things, that could mean the state and/or private employers have to spend new money to make an S.C. plan actuarially sound.

Moreover, the mandates on small employers (legislatively adopted over Romney's veto) would be a hard sell politically here - through small-business employees do now have access to relatively cheap coverage because the state has mandated them into a single pool. The "magic" of large pools is that individual claims don't drive up group premiums as much as the same-size claims in smaller groups would do.

Indeed, the Massachusetts experiment well may fail in the longer term due to underfunding. And because Massachusetts, in proper conservative fashion, attempted to harness the power of the private market, there is a risk that private insurers may not offer affordable health plans there. That could cause the whole enterprise to collapse.

But that state at least did something, and for now it's working. Its plan may not be a model for South Carolina, but perhaps some variation could work here - if only the General Assembly and governor have the courage to try. The only other option is to stand idly by as ever more South Carolinians fall between the health-coverage cracks.