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Stones & Bone / health care / volume 11 number 5, May 2009 DOSE OF REALITY Much touted as a model for Alaska and the rest of the nation to follow, the Massachusetts Health Reform Law of 2006 has proven to be a failure. Not only has the reform failed to improve access to health care and reduce costs in Massachusetts, it has made the situation worse on both counts. There is of course a reason for the failure. The framers of the Massachusetts legislation refused to address head-on the major problem with American health care: the control exerted upon it by the private for-profit health insurance industry. They did not just ignore the problem, they exacerbated it by giving the industry even more power than it had before to dictate to many more Massachusetts residents who gets health care and how much. A key provision in the Massachusetts 2006 legislation mandated that everyone in the state not yet insured would have to buy private health insurance. They would buy it or get fined—up to $1,068 each in 2009. Realizing that there is no profit in fining a person who does not have enough money to buy the required health insurance, the Massachusetts legislation exempted some residents from fines, and also provided subsidies to poor and near-poor residents to purchase health insurance (but not health care). The legislation was intended to make sure all 6.4 million residents of the state would have health insurance of some sort. When the bill passed, some 550,000 to 650,000, roughly one in ten persons, were uninsured. But it didn’t work. Despite the good intentions—and the fines and the subsidies—at least 100,000 and perhaps as many as 300,000 Massachusetts residents are still without health insurance. Those without health insurance and the poorer of the insured residents are worse off than they were before because, in passing the 2006 legislation, Massachusetts cut funding to safety-net providers. Evidently the idea was that if everybody had insurance there was no longer any need for safety nets. The end effect is that both the poor uninsured and the middle-class underinsured in Massachusetts are experiencing reduced access to health care. People seem to forget that health insurance typically pays only a part of the health care bill, and so heavy users of health care get hit hard when the safety-net disappears. In addition to their premiums, these heavy users have increased deductibles, co-pays, and other out-of-pocket expenses. Furthermore, their illnesses too often prevent them from working and that may lead them into bankruptcy. Unfortunately, the Massachusetts experiment has led to increased overall health care costs. One reason is that the legislation set up a new agency to help people buy health insurance (but not health care), and the operation of this agency has added another 4 to 5 percent to the cost of private health insurance premiums. Those premiums have escalated since the legislation was passed, increasing by over 9 percent in 2009 alone. And this is at a time when wages are stable or falling. The legislation also put new administrative burdens on hospitals that have driven up their costs. What it boils down to is that Massachusetts’ reform program has turned out to be much more costly than expected, and instead of improving access to health care the reform has made it worse for many low-and middle-income residents. The Massachusetts experiment has not helped the public, the health care providers, or the hospitals. The only player in the mix to gain from the reform has been the private health insurance industry. (For details, see: Health Letter, Vol. 25, No. 3, March 2009; also www.citizen.org/hrg/.) Despite the failure of the Massachusetts health insurance reform, Alaska may find itself led down the same garden path to higher health care costs and decreasing access to health care. An attempt to push the state in that unfortunate direction was made in the 2008 legislative session by the introduction of SB 160. The sponsors emphasized that the bill was patterned after the Massachusetts legislation enacted earlier. Senate Bill 160 failed to pass the senate, but Senators Hollis French and Johnny Ellis, both Democrats, resurrected it as SB 61 (short-titled Mandatory Universal Health Insurance) during the just-concluded 2009 session. Although SB 61 went through several hearings, it was in committee when the session ended and is still alive for consideration during the next legislative session. By the time that rolls around we can hope that our legislators will become more aware of the failure of the Massachusetts experiment to cut costs and improve access to health care. If so, they surely will use their good judgment to let Alaska’s ill-conceived copy-cat, pro-insurance-industry legislation Senate Bill 61 die a natural death. We need to reduce the role of the for-profit health insurance industry, not enhance it. What we really need is to institute a national single-payer health care system. | ||
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