Learning from Massachussetts: More Coverage, More Spending

Posted by John LaPlante in Massachusetts on Nov 11th, 2009 | no responses

A few weeks ago, the Christian Science Monitor looked at Massachusetts, to see if we could glean any lessons from that state’s experiment in health reform.

More residents have insurance than before. Well, duh. First of all, it’s the law, and second, the state extended more subsidies to purchase insurance. Third, some 17% of the people who have new coverage are children who were tossed into Medicaid–in other words, expanding an existing government program.

But are those subsidies sustainable? And can people actually get the care that they need?

The mandate “doesn’t solve the deeper problem of escalating healthcare costs.” Well, no, but how could that happen? That which you subsidize–health care service–the more you get. (Whether or not that leads to improved health is a different question.)

The Monitor says that employers have not dropped employee insurance, citing as one reason the financial penalties for doing do. But is $295 a month a sufficient penalty? I’m not convinced. The other cause the paper suggests is probably more likely–companies that don’t offer insurance are at a competitive disadvantage for workers. Yes, a company could drop coverage but increase salaries, but workers would then exchange something that’s tax-advantaged (insurance) for something that’s taxed (additional income).

Camille Paglia, in a separate publication I referred to earlier, points to another problem: “Massively expanding the number of healthcare consumers without making due provision for the production of more healthcare providers means that we’re hurtling toward a staggering logjam of de facto rationing.” Left unsaid in the Monitor piece is that we’ve already seeing increased wait times in the state.