The great national debate on health care reform continues.
We need to understand some of the key concepts the national Democrats are advancing as part of their plan to increase socialized medicine in the United States. The plans currently discussed call for an employer mandate to purchase health insurance for employees; a personal mandate for individuals and families to purchase coverage; expanded public insurance options requiring public subsidies; and the establishment of health insurance exchanges or "connectors".
A couple of observers have noted that these same policies were all incorporated into the model adopted by the state of Massachusetts a few years ago. And that model is failing in some very important ways.
Sally Pipes:
(A) substantial portion of Massachusetts' newly insured still can't
afford to purchase even basic medical services, and are effectively no
better off than before the law's passage. Meanwhile, government health
spending is spiraling out of control, adding to the state's already
massive public debt.
The numbers are staggering. In seven of the last eight years,
per-capita health spending in Massachusetts has increased faster than
the national average, according to Alan Sager, a professor of health
policy at Boston University.
Overall health insurance costs in Massachusetts are almost a third
higher than the national average, with a basic plan costing almost
$17,000 for a typical family of four. Nearly 30 percent of
Massachusetts residents report that their medical costs have increased
since MassCare's implementation.
It's a similar story for government healthcare spending. Public
health insurance expenditures are expected to be up 42 percent, to
roughly $595 million, this year compared to 2006.
The centerpiece of Massachusetts' 2006 health reform bill is
Commonwealth Care, a government program that provides free and
subsidized insurance plans to low- and moderate-income patients. It's
spending has doubled in the last two years, jumping from $630 million
in 2007 to an estimated $1.3 billion in fiscal year 2009.
Last year, rising costs lead Commonwealth Care officials to approve
a 12 percent rate increase, meaning that basic insurance costs will cut
even deeper into the incomes of most participating patients...
And employers, now required to contribute to employee coverage or
pay a tax penalty, are drowning under ballooning healthcare costs.
Indeed, businesses that sponsor high-quality insurance plans have seen
annual rate increases of 10 to 15 percent since MassCare's inception.
This has made it harder and harder for businesses to stay in the state.
And it's made the state less attractive for entrepreneurs and investors.
So what are Massachusetts residents getting for all that money?
About 432,000 people previously without insurance are now covered,
dropping the state uninsured rate to just 2.6 percent -- the lowest in
the nation.
But many of the newly "insured" still can't access medical care. In
fact, over the last 12 months, about 10 percent of state residents
failed to fill a prescription, missed a payment on a medical bill, or
skipped essential medical care.
The reason? As Harvard Medical School professor Dr. David
Himmelstein explained, "Many of the policies out there have such huge
copayments and deductibles that people can't afford care." In other
words, many patients are nominally "insured," but they're spending so
much on coverage that they can't afford the most basic medical services.
Indeed, the least expensive policy for a young family of four costs
about $9,500 annually. But that family will have to pay a $3,500
deductible before many of their benefits kick in.
Because of these costs, 23 percent of the patient population still
relies on emergency room (ER) care for basic medical treatments, the
same percentage as before MassCare was implemented in April 2006.
Between 2005 and 2007, the number of ER visits increased seven
percent, and total ER costs have gone up 17 percent over the last two
years. Most disturbingly, patients on state-subsidized insurance use ER care 14 percent more than the
average Bay Stater. Hospital officials have calculated that half of
patients visiting the ER could have had their ailments addressed by a
regular primary care doctor.
Michael Tanner:
The best estimates suggest that more than 200,000 Massachusetts
residents remain uninsured, out of the 670,000 uninsured in 2006.
That’s a far cry from the “universal coverage” that was promised when
the bill was passed...
New regulation and bureaucracy are limiting consumer choice and adding
to costs. A new mandate for prescription-drug coverage was added, and
high-deductible policies were restricted. Some Massachusetts residents
who were happy with their old insurance policies have had to change
their coverage in order to comply with the mandates.
Although much of the burden falls on individual policy-holders, the costs to the taxpayers have also skyrocketed. Despite one tax increase already,
the program faces huge deficits in the future. As a result, the state
is considering caps on insurance premiums, cuts in reimbursements to
providers, and even the possibility of a “global budget” on health-care
spending — with its attendant rationing.
The reforms have added
a new burden on companies, especially smaller ones, wanting to do
business in the state. The Small Business and Entrepreneurship Council
cites the Massachusetts health-care regulations and the mandate on
companies as its reasons for ranking Massachusetts dead last among the
50 states for business-friendly health-care policies.
A shortage
of providers, combined with higher demand, is increasing waiting times
to see a physician, especially primary-care providers. The wait for
seeing an internist, for example, has nearly doubled since the reforms
were implemented.
The state of Massachusetts provides a real-world experience in the United States that demonstrates the schemes being planned by the national Democrats are not going to deliver the outcomes promised.
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