When Massachusetts passed its new health care law, the plan was hailed as a potential model for the nation. But as we see it in action, it becomes increasingly clear that the plan does not live up to the hype.
* Slightly less than half of Massachusetts’ uninsured population actually complied with the mandate. True, the number of people without health insurance was reduced from 13% of the state’s population to 7%, but when the bill was passed, advocates promised that “all Massachusetts citizens will have health insurance.” Of course health care reform should not be judged solely by whether it achieves universal coverage, but it is fair to judge a plan by its advocates’ criteria.
* Most of those who are signing up are low-income individuals, whose coverage is fully or partially subsidized, proving once again that if you give something away for free people will take it. It certainly appears that it is the expensive and generous Massachusetts subsidies, not the unprecedented individual mandate that is responsible for much of the increased coverage.
* Adverse selection remains a big problem, with the young and healthy failing to comply with the mandate. The state refused to change its community rating laws which drive up the cost of insurance for young, healthy individuals. Not surprisingly, they don’t find this a good deal.
* The program is far exceeding its projected costs, with at least a $128 million budget overrun in its first year. Future shortfalls could run as much as $4 billion over the next 10 years. Already the state has had to raise cigarette taxes and Governor Patrick is
seeking $130 million in new business, hospital, and insurer contributions (read: taxes).
* Although the state has browbeaten insurers into holding down premiums so far, few observers expect that to continue, especially since the Connector authority has been requiring new benefits (such as prescription drug coverage).
* The program has increased demand for health care services without increasing the supply of providers. As a result, patients are having trouble finding providers and waiting lists are beginning to develop.
If that is a national model, it is a model for failure.
Michael Tanner
Senior Fellow
Cato Institute
Have you read my new book, Leviathan on the Right: How Big Government Conservatism Brought down the Republican Revolution?
Thank You Michael Tanner for some truth on this issue.I have been without health insurance since my husband retired for over two years.He was forced to retire for health reasons.I cannot understand how the State can be proud of a law that Discriminates health insurance based on income?The poor people have insurance,the wealthy have insurance but not the people in the middle.How can they be proud that I am charged double what a younger person would pay?When will the lawmakers speak out and care about all the citizens of Massachusetts?I have called my Senator and Governor Patrick’s office to be told “insurance is exspensive” if they know this why not change the law?
Michael,
I appreciate your interest in Massachusetts health reform—but not your hyperbolic critique of the Massachusetts law. Let me address your concerns in order:
* When Chapter 58 was signed, Massachusetts policymakers and advocates knew the law would not cover every uninsured individual. In a press release from the day the legislature signed the bill, former Health Care For All Executive Director John McDonough commented that the bill is “an important, meaningful step forward on the road to affordable, quality health insurance coverage for every resident of Massachusetts.” And that’s exactly what has happened. As you acknowledge, the state’s rate of uninsurance among working age adults has been cut nearly in half from 13 percent to seven percent.
* Many of those who lacked health insurance prior to the passage of the health reform law were without insurance because they could not afford it. That is why the law calls for subsidies to help low income residents afford access to care. Bay State residents agree that this is a wise use of public funds: a public opinion poll taken in June found that 77 percent of those polled backed the idea of “providing subsidized insurance” to state residents who “make less than 300 % of the federal poverty level.” There is a moral component to the state’s plan to provide affordable health insurance: access to health care is a right, not a privilege based on income. Additionally, of the 355,000 Massachusetts have signed up for health insurance coverage since the law passed, about one third are in the private market, through both non-group coverage and an increase in employer-sponsored coverage.
* Ninety-five percent of Massachusetts taxpayers have health insurance. Young adults have a number of options available to them, including the state’s new Young Adult Plans, offered through the Connector. About 4,000 have signed up for these plans, in addition to the thousands in Commonwealth Care and in the private market.
* Massachusetts health reform is indeed costing more money than originally projected—and that is because more individuals are signing up for the program. The Romney administration used a low estimate for the number of uninsured, leading to a low budget for the subsidized plan. The Patrick administration foresaw this increase in enrollment and re-projected costs last fall. The current per member, per month costs in Commonwealth Care are actually lower than that projection.
* Much of the decrease in premium prices is due to our merging of the small and non-group markets. Before health reform, a 37-year-old would have carried a $5,000 deductible and paid about $355 per month in premiums, without prescription drug coverage. Thanks to the merger, this same individual can now purchase a plan with a $2,000 deductible for about $184 per month, with drug coverage.
* On your last point, you are correct. Massachusetts, in short supply of health care providers before health reform, is certainly in greater need of them now, with hundreds of thousands of newly insured people in the system. That said, the Governor just signed into law a bill introduced by Senate President Murray that will, among other things, bring more primary care providers into the workforce.
It is easy to be a critic. It is harder to take a systemic problem like uninsurance and try to fix it. Yet that is exactly what we’re doing in Massachusetts. We believe Massachusetts has the lowest uninsurance rate in the United States and is the only state with a decreasing rate. I hope this additional information may be helpful to you—-and to WBUR readers-—in understanding the landscape of health reform.
[...] the beginning, so of course they think it’s a “model for failure.” Writing on WBUR’s Commonhealth blog, Cato Senior Fellow Michael Tanner throws all of his arguments at health [...]
Most Americans agree with Lindsey’s statement that: “…access to health care is a right, not a privilege based on income.”
But there is a HUGE difference in her interpretation of the moral obligation to fulfill this right: “There is a moral component to the state’s plan to provide affordable health insurance…”
You see, the current MA Law continues the sorry treatment of healthcare being treated mostly as a commodity to be bought and sold in the commercial marketplace, instead of healthcare being treated as a human right and public good to be GUARANTEED TO ALL.
A pig in lipstick is still a pig (e.g. the “MA Health Insurance Law”) and, BTW, the group calling itself “Health Care For All MA” that pays Lindsey Tucker’s salary still rakes in the dough from the health insurance industry, as detailed by the Attorney General’s office…
For an overview of what real healthcare reform in Massachusetts would look like, please visit http://masscare.org/what-is-single-payer
[...] Tucker from Health Care for All’s A Healthy Blog responds to a post (here) by Cato Institute fellow Michael Tanner criticizing Massachusetts’ health insurance [...]
Michael,
I have to agree that the MA healthcare reform is indeed a model for failure. I was laid off from my job that provided health insurance at the beginning of this year. In order to “get by” I had to accept a job that does not offer employer paid health insurance. Seeing as though I currently make little more than minimum wage, I cannot afford health insurance, nor can I afford to pay the penalty at the end of the year. In addition to that I am a person who simply cannot go without health care. I have a medical condition since birth that requires me to make regular doctors visits and take a life long perscription, of which my body rejects the generic form of.
I applied for commonwealth care while I was still receiving unemployment benefits, and was put on a plan. However, I have recently had my health benefits canceled because my employer offers a health insurance plan. According to the rules of commonwealth care, I should still be eligible to receive benefits if my employer does not contribute 33% of the premium for an individual plan, which it does not.
I have done everything that I was supposed to do when asked to do it. I have sent them proof of my income and answered all of the questions honestly on the employment review form I received. A while after my paperwork was sent in I also received an “exceptions” form in which they requested information about my employers contribution to the health care plan they offer. Also of which I filled out honestly and sent back.
Without any reply from commonwealth care my health coverage was still revoked. When I called to ask them why they told me that they either never received the exceptions form or lost it.
So through no fault of my own, I was denied health coverage. It seems that a system that has been in place for little over a year is already broken. Why should people who cannot afford health insurance, but are required by law to have it, have to jump through hoops to get it?
I have even considered just buying a plan I cannot afford outright and putting it on my credit card to further avoid the having to cut through all the red tape involved in trying to obey the law, and keep myself alive.
I agree with James that we should adopt a single-payer healthcare system, that guarantees coverage to all citizens, regardless of income.