Massachusetts, No; Indiana, Yes

Federalism–true federalism, in which states are more than mere administrative offices of the national government–allows Americans to test contrasting ideas for achieving the public good. When it comes to health care, Massachusetts took one path (to great public attention) and Indiana has taken another.

John Hood, president of the John Locke Foundation (a group that focuses on policy in North Carolina), reviews the experience of both states, and finds much to like in Indiana’s approach.

Here’s the key part:

[Massachusetts Governor Mitt] Romney’s plan was based on all the old, odd assumptions of the Left: that trying to force people to buy health plans they may not want is either practical or wise, that spending more money on health care will slow health care inflation, and that 2+2 equal whatever some politician wants it to equal, rather than having an objective reality.

[Indiana Governor Mitch] Daniels’ plan was based on past experience and human nature: that informed consumers can make wise health care decisions, that financial incentives matter and can be harnessed to advance reform, and that only if we stop making medical services appear virtually costless to patients will cost containment become feasible.

Guaranteed Issue, Community Rating Lead to High Premiums

Reason Magazine takes a look at the dismal track record of state “reform” efforts to date. It cites New York as “exhibit A” for its guaranteed issue and community rating provisions. It says, “In 1994 just under 752,000 individuals were enrolled in individual insurance plans, about 4.7%  of the nonelderly population. This put New York roughly in line with the rest of the U.S. Today that figure has dropped to just 0.2%. By contrast, between 1994 and 2007 the total number of people insured in the individual market across the U.S. rose from 4.5% to 5.5%.”

It adds Washington state as another example.”In 1996 similar reforms in Washington state preceded massive premium spikes in the individual market. Some premiums increased as much as 78% in the first three years of the reforms-10 times the rate of medical inflation.” And it cites a Health Affairs study as saying, “in addition to Washington and New York, the individual insurance markets in Kentucky, Maine, Massachusetts, New Hampshire, New Jersey, and Vermont “deteriorated” after the enactment of guaranteed issue.”

It also notes about Massachusetts that, “Health insurance premiums in the Bay State have risen significantly faster than the national average, according to the Commonwealth Fund, a nonprofit health foundation. At an average of $13,788, the state’s family plans are now the nation’s most expensive.”

Meet the New Price Control Czar

In recent years, presidents of the United States have come in for some criticism for proliferating the number of “czars.” I’m not knowledgeable in Russian history, but did the real czars attempt to set prices for entire industries? That’s what Gov. Deval Patrick (D-Mass.) wants to do in his state.

From the Boston Globe: “Governor Deval Patrick is seeking sweeping authority to review and reject rates charged by hospitals, physician groups, medical imaging centers, and insurers, in a broad new effort to make health care more affordable, particularly for smaller companies and their workers.” The headline of the Globe article is “Patrick wants health cost veto,” but a more appropriate headline might be “Patrick wants to run health care.” After all, prices are an essential feature of any market.

One tiny bit of sunshine in the dark cloud that Patrick would cast over an entire industry is that he calls for a two-year moratorium on new mandated benefits, which contribute to increases in health insurance premiums.

Patrick spins his grab-and-control idea as promoting “transparency.” To be sure, prices for medical services are anything but transparent. But that’s due in large measure to the fact that what consumers pay for health care is obscured through (a) insurance, even for routine and predictable services, which (b) is paid for through employers, who get tax breaks for choosing for their employees what those employees (not themselves) will have in way of coverage. And all this just applies to people who are not on the government dole. For people enrolled in government programs, the price of services is obscured completely.

In other words, Gov. Patrick, seeing a problem caused in large measure by government control, wishes to use even more government control.

Avoiding Massachusetts and the Insurance Mandate

Scott Brown, soon to be the newest member of the U.S. Senate, has said he would vote against ObamaCare. That’s good. But he has supported RomneyCare, the Massachusetts reforms that bear some resemblance to ObamaCare.

The Cato Institute, like many organizations, has studied the effects of the Massachusetts reforms. The title? “The Massachusetts Health Plan: Much Pain, Little Gain. In a pre-release blog post on Cato-at-Liberty, Michael F. Cannon, one of the two authors of the report, offered a few highlights:

• Official estimates overstate the coverage gains under the Massachusetts law by roughly 50 percent.
• The actual coverage gains may be lower still, because uninsured Massachusetts residents appear to be concealing their lack of insurance rather than admit to breaking the law.
• Public programs crowded out private insurance among low-income children and adults.
• Self-reported health improved for some, but fell for others.
• Young adults appear to be avoiding Massachusetts as a result of the law.
• Leading estimates understate the cost of the Massachusetts law by at least one third.

Massachusetts Miracle, or Muddle?

Here’s the executive summary of a new Galen Institute report (PDF):

Interest in the Massachusetts health reform plan remains high as observers at the federal and state levels monitor its progress toward achieving universal health insurance coverage and controlling rising health costs. Many of the features of the Massachusetts plan are contained in legislation under consideration in Congress, including a bill offered by Massachusetts Sen. Edward Kennedy’s Health, Education, Labor, and Pensions Committee. Therefore, it is worth assessing the experience with the Bay State’s reform initiative so far for lessons that may be useful for federal lawmakers.

When the state’s reform plan was enacted in 2006, then-Massachusetts Gov. Mitt Romney was hailed for achieving what no other political leader has been able to accomplish: Developing a broad health reform plan with strong bipartisan support. By enacting sweeping health reform legislation, Massachusetts sought to be the first state in the nation to have all of its citizens covered by health insurance.

Since then, state officials, including Gov. Deval Patrick, as well as many others in the health sector and business community, continue to advance the reform experiment. But implementation continues to pose many challenges — both in access and costs — and observers are cautious about the outcome.

For example, more than half of those newly enrolled in health coverage in Massachusetts are in free or heavily subsidized plans, causing significant budget pressures for the state. Rising costs for health coverage and health care pose the biggest challenge to the success of the reform effort. And physician and medical workforce shortages have been exacerbated, with half of the state’s internists and family physicians closing their practices to new patients.

Architects of the plan are confident it will succeed. Jon Kingsdale, head of the Commonwealth Health Insurance Connector Authority, and others implementing the plan say support remains strong among political leaders and the business community. Gov. Deval Patrick cites 439,000 newly insured residents in the state as evidence of its success. But major problems remain, and duplicating the Massachusetts experiment would be a significant challenge for any other state, much less the federal government.

Massachusetts’ reform initiatives that are being considered by Congress include an individual mandate, employer play-or-pay mandate, a national health insurance exchange, strict regulation of private health insurance, expansion of Medicaid, and establishing a government-mandated health benefits package. Before proceeding to implement this experiment on a nationwide scale, it would be wise to learn more about how the reform plan in this sophisticated, highly-motivated state is developing.

Why Should Scott Brown Make a Difference?

A blog at The Heritage Foundation describes today’s special election in Massachusetts this way: “Health Care in the Balance as Ground Shifts Under Obama.”

And perhaps it is, with underdog candidate Scott Brown saying “I am opposed to the health care legislation that is under consideration in Congress and will vote against it.” A Brown victory would cause all sorts of political chaos for advocates of increased government  involvement in health care.

But it’s a sad day in which the health care services available to anyone are subjected to the political winds. One man–Scott Brown–could make a difference. That’s not good. Then again, it’s not good when 536 people–the U.S. Senate, U.S. House, and president–make the difference in what kinds of health services 300 million people have. Their needs and interests are too broad, too diverse, and too unpredictable to be subject to the whims of a group of people who could fit in one airplane.

Government can have a role in enforcing contracts that patients make with insurance companies or doctors. It might even provide health care welfare for the poorest people, as it does, say, with food stamps. Beyond that, the decisions of a few people, who use the mechanisms for power for personal benefit–whether that’s to advance an ideological vision or to line their pockets–do violence to the dignity and welfare of us all.

In a better world, political power would be so decentralized that the election of candidate A or candidate B in one state–or 50–would make no difference.

A “Contemptible” Conspiracy Theory

Will Democrats drag their feet in certifying the results of next week’s special election results in Massachusetts should the Republican candidate, Scott Brown, win?

Barney Frank (D-Mass.) says no, calling it conspiracy theory at its most contemptible.”

Is Scott Brown the Cure?

A lot of people who don’t like the health reform bills in Congress are excited about the fund-raising surge of Scott Brown, the senatorial candidate from Massachusetts who would replace the late Sen. Ted Kennedy. Brown says that Congress should start all over on health reform, a position I agree with.

But would Senator Brown bring good ideas to the Club of 100? No, says one activist, who hones in on Brown’s support for the Massachusetts law that in many ways is the blueprint for congressional legislation: “It seems to me that anyone not completely outraged by that law can in any way be a true lover of liberty.”

Also, there are many practical problems with the law, starting with the fact that it is not “universal” and is costing a lot of money. The requirement that each person buy health insurance, moreover, puts government more firmly in control over health, since government first define what is “acceptable” insurance coverage if it is to police the mandate.

Politics, of course, is the world of non-ideal choices, so advocates of personal choice may in fact support Brown over his opponent, who has vowed to support the Senate plan.

UPDATE: David Gratzer writes about the significance of the election for health care reform.

It’s turning into a referendum … on approval of the White House’s health care management. Why the shift? Bay State voters may be decidedly liberal, but they understand a thing or two about sweeping health reforms, having passed their own legislation back in 2006.

In 1991, a special election in Pennsylvania for the U.S. Senate turned on health care. The same may be true in 2010 in Massachusetts.

Damn Democracy, Full Steam Ahead

One of my graduate school professors–one whose political preferences were far to the left of mine–rammed home the point that democracy was all about process, not results.

The leaders in the Massachusetts Democratic Party could learn a lesson from the good professor.

In 2004, they changed the law so that the governor–at the time, a Republican–could not appoint someone to the U.S.  Senate in time of a vacancy. They thought that Sen. John  Kerry would be elected president, leaving an opening.

In 2009, they changed the law so that the governor–this time, a Democrat–could appoint someone. This was to make  sure that there would be someone to cast  a “yes” vote on Obama/Redi/PelosiCare. They thought that, given the state’s lopsided Democratic majority, the party’s candidate would win.

Now in 2010, the special election  that the Democrats engineered is coming up in a few days. It’s becoming something of a referendum on President Obama, the Democratic Congress, and the health policy laws they are enacting, and the Republican candidate is surging. He might, remarkably, win.

So consider this from the Boston Herald: “Rep. Niki Tsongas (D-Lowell) was sworn in at the U.S. House of Representatives on Oct. 18, 2007, just two days after winning a special election to replace Martin Meehan. In that case, Tsongas made it to Capitol Hill in time to override a presidential veto of the expansion of the State Children’s Health Insurance Program.”

How long would it take the Republican candidate to be sworn in, should he win?

Oh, about a month. What was that I heard last year about the need to change the law  so that Massachusetts had two senators in office?

<Chirp>

Did I mention that he would vote against the government takeover of health care?

Two States, Two Exchanges

Both Utah and Massachusetts have a government-sponsored health insurance exchange. They’re very different from each other. The Pioneer Institute has a new report drawing lessons from each exchange. I haven’t had the chance to read the report, so here’s the teaser that is currently on the institute’s home page:

Pioneer has released its newest paper, Drawing Lessons: Different Results from State Health Insurance Exchanges [PDF] to examine the design and implementation of health insurance exchanges in Massachusetts and Utah. The report finds very different results from each and provides clear, practical lessons for political and policy leaders. It also highlights the success and failures of state health insurance exchanges, a critical topic as federal officials debate the nature of national health reform.This report is a precursor to Pioneer’s upcoming series on health care reform, Interim Report Card. These reports examine various aspects of Massachusetts’ health care reform, including access, financing and affordability, administration, and cost-effective quality of care. This will constitute the first attempt to provide a comprehensive assessment of the Massachusetts reform.

Check it out.