WSJ: “The Massachusetts Health-Reform Mess” Swing and Miss
The late John Calfee, has an opinion piece in the WSJ this morning on Massachusetts health reform.
The piece is right on with a few fundamental points.
One, that it was hubris to take the state experiment of 2% of the population—in a high income, high insured, and high medical infrastructure state– and mandate it on all other states, as if they are all the same.
I also think Governor Patrick’s most recent bill is ill-defined and misguided in its potential anti-market elements.
However, there were a few statements that are on very shaky grounds in the piece or are just wrong.
(Gov. Deval Patrick wants a new law to force the unions into the Connector.)
This is not true, the Governor wants to force them into the Group Insurance Commission (GIC) which is not the Connector. It is an entity that offers health insurance to state and local officials; it is independent from the Connector and is run very differently. The savings from this could be in the hundreds of millions for local governments.
Despite an individual insurance mandate, thousands of consumers wait to purchase coverage until they require costly procedures and then exit after paying a modest penalty. That makes insurance more expensive for everyone else.
This was fixed last year with an open enrollment period that just took place earlier this year. Ch 288 of the Acts of 2010.
John Cogan, Glenn Hubbard and Daniel Kessler reported in the Forum for Health Economics & Policy (2010) that insurance premiums for individuals (alone or in employer-sponsored group plans) increased 6% to 7% beyond what they would have without the reform. For small employers, the increases are about 14% beyond those in the rest of the nation.
The methodology on this report is very shaky, and the authors acknowledge as much in the report.
Overall reform has had mixed results. Pioneer Institute published a series of reports on the matter last year that examined the data in four important areas.
- Increasing Access
- Equitable and Sustainable Financing
- Administrative Efficiency
- Cost-Effective Quality
One would be on much more solid ground to critique the handling of insurance offerings for small companies under reform, instead of these shaky claims. See my Heritage Foundation piece on it.