The Devil is in the Details

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Anyone involved in the Massachusetts reform is probably being asked the same questions that I am being asked.  How does the federal reform differ from MA’s reform?  How will it affect what we’ve already put in place?  Why is there so much opposition, hasn’t the MA reform worked reasonably well?   The answers are not simple.   Unfortunately, one must review the 2000+ page bill and another 100+ pages of reconciliation language in order to prepare a comprehensive review.  And, even then, you’re only partially there.  Many details, which could have a material impact on MA and the nation as a whole, will need to be further detailed through the regulatory process during what will be a very lengthy implementation phase.  So, while I continue to slog through the bills’ language in order to understand the similarities and differences, I provide a few high-level thoughts here.

Why the MA Reform was Different

First, Massachusetts began in a very different place.  I know it’s been said time and time again that other states are not like us but I think it’s important to note the BIG differences again:

–       MA’s uninsured rate was one of the lowest in the nation BEFORE reform

–       MA’s employer offer rate (of insurance) was one of the highest in the nation

–       MA’s insurance laws included guaranteed issue, forbid underwriting in the small and non-group market, and limited rating to certain factors within a 2:1 band in those markets

–       MA’s safety net (Uncompensated Care Pool) was supporting over 1 billion dollars of care to the uninsured.   Most states do not have anywhere near this amount of state, federal, and private funds available for redistribution in the form of subsidies.

Second, Massachusetts stood to lose $385M in safety net federal funding if we did not implement significant reforms.   For ideological reasons some may believe that such a loss would have been ok and that it might have encouraged us to look closer at our health care cost problems.   I believe we would have found a way to maintain our generous health care safety net by either cutting something else (like education or aid to cities and towns) or increasing taxes, had we not acted.

Third, the reform in Massachusetts had bipartisan support.  Some like to characterize Governor Mitt Romney as walking away from the bill he shaped while campaigning for presidential office.  But I think he walked away from the implementation of the bill.  There were a number of key decisions made post-reform that were not what Governor Romney had supported.  These will be discussed in future blog entries.

OK, but how do the MA and Federal reforms compare?

Well, no one can argue that the basic framework is the same.  But that’s like saying a Kia and a Lexus are both cars.  Both bills require people to obtain coverage, there are subsidies for people who cannot afford insurance, and there’s an exchange for transparency and distribution of insurance…..that all sounds familiar, right?  And, full disclosure here, I like that basic framework.   It’s certainly better than a single-payer system.  But, the devil is definitely in the details.   Some of them are right there in the 2000-page bill and others are yet to be determined.  So, stay tuned, I plan on blogging on some of the important differences over the next few weeks.