A panel of the US Court of Appeals for the District of Columbia recently
upheld the lower court's ruling that Congress did
not overstep its authority by requiring us all
to buy health insurance or pay a penalty on our taxes. So, with a national universal mandate looming in
2014, I'm surprised at the lack of attention being paid to the Massachusetts experience. Dubbed "RomneyCare",
it seems like most people learned about it from the false claims and accusations made during the republican
debates. I thought it would be worthwhile to find out what is really happening and separate fact from fiction.
There are several similarities and several differences between "Romney" and "Obama" care. Both have
individual mandates, subsidies for low income earners, expanded Medicaid, an insurance exchange for
individuals and employer requirements. The federal plan puts greater emphasis on helping smaller businesses
with tax credits and has included steps to curb healthcare spending. The Mass. plan is still addressing
issues with small businesses and it did not contain cost saving measures which will be addressed in
separate legislation.
Over 98% of residents were covered by a plan of their choice in 2010. Nationally, the uninsured rate is
15%. The goal was to get as close to universal coverage as possible. Since 2006, the state has added
401,000 people to the ranks of the insured. Granted, Massachusetts had a "head start" in that it had a
lower percentage of uninsured than the national average and a higher percentage of businesses that provided
insurance to their employees than the national average. But to imply universal coverage was a failure is wrong.
The law is not bankrupting the state. The original law did not contain any cost saving measures.
The emphasis was on universal coverage, establishing insurance exchanges and allowing providers time
to absorb the newly insured. Mission accomplished. Cost saving measures are currently being formulated
and will be introduced via separate legislation. Adding 401,000 to the insured rolls aside, the increases
in costs since the inception of the law five years ago are predominately a continuation of the unfortunate
and expensive trend in healthcare inflation facing every state. The Taxpayers Foundation says the spending
is in line with what was expected. The added cost to taxpayers in 2010 was $353 million or 1.2% of the
state budget.
Insurance premiums went up, but it is hard to determine how much of the increase was due to the
historically high medical inflation trend versus the law. Premiums have actually declined for
individual purchasers. A major disappointment is the negative impact the law has had on small
businesses. They have seen slightly faster increases in their premiums (15%) than before the law
was passed. What happened was the state decided to merge the newly insured individual and small
business risk pools. So, the less healthy previously uninsured individuals benefited actuarially from
being merged with the more stable and insured small business groups.
Prior to the merger of these two
risk pools in 2006, individual premiums were $437 a month. In 2008, post merger of the risk pools,
the individual premium dropped to $360 a month. Healthcare premiums had been rising at alarming rates
before the law was passed. Critics say that since the law was passed, Massachusetts rates have been
increasing faster than the national average. That is true, but they always have. Nineteen states have
seen higher annual increases than Massachusetts and they do not even have universal coverage.
For larger businesses, the law didn't really change things much. But as discussed, small businesses
are still disappointed with affordability. However, in a 2008 poll published in Health Affairs, 52%
of all businesses said they thought the law was good for the state and 77% said employers have some
responsibility to provide coverage. (The 77% is an indication of the culture/philosophy that exists
in Massachusetts.) According to a 2009 Taxpayers Foundation report, they estimate the increased cost
to employers was about $750 million to cover newly insured employees and their families. The state
spent another $350 million on subsidizing insurance for the previously uninsured indigent. The vast
majority of businesses believe health insurance is critical to retaining the best employees. To help
small businesses, the state passed a law last year to allow small businesses to develop purchasing co-ops.
One of the most unsubstantiated and worst rumors is that quality has declined and waiting
times have increased. A 2010 survey by the Mass. Medical Society comparing wait times to 2005
was inconclusive. Internal Medicine wait times increased 6 days to 53 days, (certainly not great
in the first place) but Family Medicine wait times went down by 15 days to 29 days. Cardiology,
gastroenterology and orthopedic wait times all went down as well from the "pre-law" year 2005.
The Medical Society had been reporting ongoing physician shortages and increasing wait times well
before 2005. According to the DC based think tank Urban Institute, that has been monitoring things
since universal coverage was enacted, access to care and the use of overall care have actually
increased. There is evidence of strong gains in the use of preventive care and prescription drugs
which were specified under the state's minimum credible coverage requirements. In addition, adults
were more likely to rate the quality of care received under reform as good or excellent.
The vast majority of residents are satisfied with the law so far. Surveys by the Urban
Institute and BCBS Foundation found that 67% of nonelderly adults supported the law in
2009. Another 2009 survey by the Boston Globe and Harvard School of Public Health found
59% of the state supported the law. A Harvard poll of physicians in 2009 found 70% support.
There are no bills to repeal the law and there has been no taxpayer revolt because residents
must confirm their coverage on their tax returns.
Massachusetts is the great American experiment for mandated universal coverage. I hope
the Obama administration is taking notes. Predications that physician practices and
hospitals EDs would be overrun with hoards of previously uninsured and untreated patients
proved unfounded. Predictions that businesses would leave the state en mass were also
unfounded. But now comes the hard part: controlling medical costs and developing an
affordable and equitable physician and hospital reimbursement system. Stay tuned.
