Another take on “budget buster” report: Health law was more expensive, one analyst says

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Josh Archambault appreciates that there are other people in the state, besides him, trying to calculate the overall cost of the 2006 Massachusetts law requiring most residents to have health insurance.  And, he said, he thinks a report out last week from the Massachusetts Taxpayers Foundation mostly got it right.

But one figure in the report, putting the annual increase in state spending for health reform between fiscal year 2006 and fiscal year 2011 at about $91 million, just struck him as odd.

The report, funded by the Blue Cross Blue Shield of Massachusetts Foundation, explained that the number came from calculating the difference between the 2011 and 2006 budgets and dividing that in half to account for the chuck paid by the federal government. That total was $453 million. Divided by five years, that’s $91 million.

Archambault, director of health care policy for the conservative Pioneer Institute, took a different approach. He looked at the increase in each year from the 2006 baseline, calculating the difference in spending between fiscal years 2006 and 2007, then between 2006 and 2008 and so on. He added those together, divided by five, then cut the figure in half to account for the federal portion. His total: $369 million.

“That’s cash out the door,” Archambault said. “How much more money was going out the door once the reform has been passed?”

He acknowledged that neither formula is perfect, but that looking at the total increases from the 2006 baseline is important.

“It’s serving somewhat as a proxy for the cost of the law,” he said.

Archambault has a few more quibbles with the foundation’s analysis and the state’s reporting, outlined on his blog.

Which accounting seems more right to you?

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