Massachusetts Health Insurance Plan Doing Just Fine
Negative narratives about the crippling expense of publicly funded health care coverage are as plentiful as mushrooms after a rain. Most of them have little, if any, merit — and, according to an editorial in today’s Boston Globe, the one about Massachusetts’ plan being a fiscal nightmare is flat-out wrong:
Pundits and politicians who oppose universal healthcare for the nation have a new straw man to kick around – the Massachusetts reform plan that covers more than 97 percent of the state’s residents. In the myth that these critics have manufactured, this state’s plan is bleeding taxpayers dry, creating nothing less than a medical Big Dig.
The facts – according to the Massachusetts Taxpayers Foundation – are quite different. Its report this spring put the cost to the state taxpayer at about $88 million a year, less than four-tenths of 1 percent of the state budget of $27 billion. Yes, the state recently had to cut benefits for legal immigrants, and safety-net hospital Boston Medical Center has sued for higher state aid. But that is because the recession has cut state revenues, not because universal healthcare is a boondoggle. The main reason costs to the state have been well within expectations? More than half of all the previously uninsured got coverage by buying into their employers’ plans, not by opting for one of the state-subsidized plans.
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It will be proportionately more expensive nationally to provide coverage for the uninsured than it has been here simply because the state began the task with a much lower rate of uninsured, 7 percent, compared with the US rate of 17 percent. But a national plan that relies, as Massachusetts’ does, on both government-subsidized insurance and a mandate on employers to offer insurance or pay a penalty (in Massachusetts’ case, a very small penalty) should be able to cover nearly everyone without busting the budget.
Ezra Klein points to the key reason the Massachusetts plan has worked (the first link, which I bolded):
It’s been convenient for critics of health-care reform to assail the Massachusetts effort. But the Massachusetts effort — which was focused on coverage, not cost — worked. It has been a success. It has radically cut the number of uninsured residents. It has come in at about the cost predicted. It has proved popular. And it has given Massachusetts the courage to contemplate much more aggressive cost control than anything that’s being consider at the national level, or in another state.
That last bit is important: Doing coverage actually pushed Massachusetts to begin addressing cost. If national health-care reform has a similar effect, it will have been wildly successful.
Of course, we could do what Republicans and other conservatives want to do — which is essentially nothing — and wait until the number of uninsured gets to 25%, or higher. Then it will be even more expensive to insure most of the uninsured, and the GOP can use that as an excuse to throw up their hands.
18 Responses to “Massachusetts Health Insurance Plan Doing Just Fine”
Sort of like the rationale for the cap-and-trade bill.
“If we can't have deficit-neutral, peachy-perfect and extremely elaborate plans with as little waste as possible right now, we'll just force everyone to wait for some hypothetical future where we're feeling less whiny and non-constructive – and both the problem and the solution will be an even greater drain on the budget which will lead to even more complaining from us.”
Exactly Kastanj. Minority rule is so much better than majority rule. I'm proud to say I don't live in a democracy.
“Yes, the state recently had to cut benefits for legal immigrants…”
No, there's no problem at all then, right?
I realize that the problems massachussets are having is because of their over-all budget, not necessarily just the health care program, but the same thing would happen at the national level as well (as a recession hits, more people sign up for the public option). Except that, unlike the states, the federal government doesn't have to balance its budget, so it would just add to the deficit.
And, maybe someone can help me out. How does the program only cost $88 million, but cutting benefits for legal immigrants saves 130 million (http://www.nytimes.com/2009/07/15/us/15insure.h… And why is it that the same Boston globe said the budget for the health care program was $869 million, in an article saying that the state would actually probably spend more than that (http://www.boston.com/news/local/articles/2008/… Did the budget really decrease 10-fold in one year?
Furthermore, if things really are going peachy in Massachusetts with the health care program (which they may be–I don't live there so I can't say for sure, and I like Romney anyway), then doesn't that prove that we don't need a massive federal government program to fix the problem? Shouldn't we leave it to the states if the states can handle it? It then has the added benefit of being constitutional, for what that's worth.
The Massachusetts plan is certainly instructive. Of the info I found on it, the evaluation at http://www.kff.org/uninsured/upload/7777.pdf seemed reasonably balanced. Massachusetts has done well at improving access as Kathy says. But it hasn't slain the cost dragon. The system has cost more than anticipated, and premiums and copays are going up faster than the national average. Providers are howling, which is not necessarily a bad thing, but if squeezed too hard they'll end up passing the pain on to patients.
It would be great to see more state-level health care experiments. The federal government could usefully encourage them by easing regulations like ERISA, leaving the states more room to maneuver.
I've said it before and I'll say it again: if the public OPTION is predicted to be such a horrible fiscal nightmare doomed to failure then why is MedMob fighting it with all the king's horses and all the king's men, tooth and nail, kicking and screaming?
Mmmm hmmm….
Ain't that hard to put two and two together now is it?…lol..
The public option is meant to be a tax subsidized pork program that will given free government benefits to people and pass the costs onto the tax payers (much less than 1/2 of Americans). It will encourage firms to drop private coverage and will encourage people to game the system. The health insurance indsutry realizes that the long term goal of the private option is to put them out of business and to use tax dollars from tax payers to subsidize everyone else. If you look at Mediciad, Medicare, TRICARE, VISTA, S-CHIP, it should be obvious that the costs of a public option will be much higher than currently planned for.
“if the public OPTION is predicted to be such a horrible fiscal nightmare doomed to failure then why is MedMob fighting it?”
They're concerned about going out of business. I'm concerned that adding a new entitlement program is an irreversible decision. Medicare and social security are already fiscal nightmares, and not only are they not going anywhere, politicians lose their jobs for even suggesting we adjust them.
And, maybe someone can help me out. How does the program only cost $88 million, but cutting benefits for legal immigrants saves 130 million (http://www.nytimes.com/2009/07/15/us/15insure.html )? And why is it that the same Boston globe said the budget for the health care program was $869 million, in an article saying that the state would actually probably spend more than that (http://www.boston.com/news/local/articles/2008/… )? Did the budget really decrease 10-fold in one year?
Glad you caught that, Adelinesdad. The Boston Globe got the numbers all wrong, which made the cost problem seem much less serious than it really is.
I still dont' see why the damn thing can't be a single-payer program. Why can't people pay a set small increment each month per person like a premium and the rest be made up by taxing noxious, but legal, substances like alcohol, tobacco/nicotine products and those useless foods made up of lethal amounts of saturated fats, salts and sugar?
MedMob is trying to divert. So if your fear is dear MedMob, that the program will become entrenched and your reasons are really and truly that it will become a fiscal nightmare then let's try this: make it temporary. Make the legislation last for seven years only. If it is undoable by then, take it off the books. Or are you afraid that people will come to like paying WAY less on their premium for services that will be denied at a far less greater rate than your “claims adjusters” deny them already?…: )..lol….LOL…
Yep, that's what I thought…
Massachusetts had the luxury of dealing with coverage before cost. When we're spending over 15% of our GDP on it and accruing such massive deficits, the country does not.
CStanley,
Thanks for clearing that up. The Boston globe really should have done some digging on that number, since it is so absurdly small, especially since they reported a much different number a year before.
Also, on the way home from work today I heard Howard Dean say on the radio that the Massachussets plan does not have a public option. He argued that this was why it was having trouble controlling costs. I thought maybe he was wrong, so I went searching again. It turns out it does not (http://www.medpagetoday.com/Washington-Watch/Wa… ), although in some places I saw what was referred to as a “public plan”, but as far as I can tell that just refers to the “Connector” which is made up of private insurance plans.
So again I'm confused. What are you arguing for, Kathy? You've just extensively quoted an article which shows an example of a program instituted at the state level, which is based on a regulated private insurance market (with no public option), and apparently is doing well (except for the fact that the state is experiencing difficulties related to the recession as all states are). Are you saying this is the way we should go? If so, for I think the second time ever, I agree with you.
Heh, I noticed that too, AD, about the lack of a public option in the MA plan. From what I've seen of the MA plan, it shares a lot of features with the compromise 'co-op' plan that was put forth by the Blue Dogs- you know, those creeps who were bought off by the insurance companies.
My biggest fear with a public option is that the insurance companies will push the sickest patients onto it and drive up taxpayer costs while they make bigger profits on the healthier patients who don't cost as much.
jeainnj- that's a reasonable argument, except that I'm pretty sure that the bills being proposed would also impose regulations to prevent the insurance companies from doing that. And really, what you're describing is exactly what happens now, except instead of pushing people to a public option insurance plan they drop coverage for people who cost too much to insure.
Of course if the companies are mandated to cover high cost patients, then the problem still remains of how to spread the cost of that care. As many people have noted, a system with mandates like that is not a true insurance system, and either premiums would have to be extremely high or the insurers would have to be subsidized or go out of business.
And we all know how difficult it is for companies to thwart federal regulations…
This is great to hear! I've seen a lot of media attention going after the Massachusetts health insurance program but barely any defending it. I love to keep up to date on Massachusetts issues and I will be returning to your blog. MassDriver.org is a great source of up to date Massachusetts news as well!
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