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The Massachusetts Health Mess
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| Parent(s) |
Issue
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| Contributor | Jason |
| Last Edited | Jason Jul 11, 2009 05:12am |
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| Category | Opinion |
| Media | Newspaper - Wall Street Journal |
| News Date | Saturday, July 11, 2009 11:00:00 AM UTC0:0 |
| Description | In a rational world, the prognosis for ObamaCare would wait on the evidence in Massachusetts, given that the commonwealth's 2006 program closely resembles what Democrats are trying to do in Washington. If the results were widely known, it might be dead on arrival.
The Massachusetts law, which was championed by former GOP Governor Mitt Romney, imposed an individual mandate, requiring nearly all residents to buy health insurance or else pay a penalty. (The exceptions are those who qualify for the state's public program.) This was supposed to cover everybody and save money too. We've written before about how costs have exploded, but it also turns out that consumers have other ideas.
For 15 years Massachusetts has also imposed mandates known as guaranteed issue and community rating -- meaning that insurers must cover anyone who applies, regardless of health or pre-existing conditions, and also charge everyone the same premium (or close to it). Yet these mandates allow people to wait until they're sick, or just before they're about to incur major medical expenses, to buy insurance. This drives up costs for everyone else, which helps explain why small-group coverage in Massachusetts is so much more expensive than in most of the country. Mr. Romney argued -- as Democrats are arguing now -- that the individual mandate would make that problem disappear, since everyone is always supposed to be covered.
Well, the returns are rolling in, and a useful case study comes from the community-based health plan Harvard-Pilgrim. CEO Charlie Baker reports that his company has seen an "astonishing" uptick in people buying coverage for a few months at a time, running up high medical bills, and then dumping the policy after treatment is completed and paid for. Harvard-Pilgrim estimates that between April 2008 and March 2009, about 40% of its new enrollees stayed with it for fewer than five months and on average incurred about $2,400 per person in monthly medical expenses. |
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