Massachusetts’ struggle to make “universal health insurance” work continues to be an excellent peek at what the entire nation faces when ObamaCare kicks in — and the picture remains ugly.
Gov. Deval Patrick has just reached a truce with three of the four top insurers in the state, compromising on this year’s rate hikes for the small-business and individual markets. Plus, the state last week passed a law allowing some small businesses to form cooperatives to bargain jointly for health plans. But the numbers still don’t add up.
When the Bay State passed its health-reform law in 2006, 9 percent of non-elderly adults lacked insurance; that’s now down to 5 percent. The law didn’t reduce expensive emergency-room use as predicted. Instead, emergency-room visits have climbed by 9 percent, or about 3 million visits, from 2004 to 2008. But it’s bankrupting the state, while the pressures on small businesses and on health-care insurers and providers continue to build toward the breaking point.
Health care now consumes 35 percent of the state budget, up from 22 percent in 2000. Patrick recently asked Washington for $473 million to help make the Massachusetts reform work — on top of the $1.2 billion in support the feds have already kicked in over three years, more than $3,000 per person in the state.
Whenever the federal help stops coming, the Bay State will have to either hike taxes further to fund its program, or start cutting benefits. Reimbursements are already so low under the state-subsidized plans (most of whose 152,000 enrollees pay nothing) that doctors are already refusing to accept new patients with that “coverage.”
Yet small businesses are clearly finding it necessary to dump their employees on the public health plans. The Boston Globe recently reported on a broker who helps firms do just that; his practice is booming. He’s seen about 90 business owners terminate their plans since April.
What’s forcing up costs so much? Part of it is simply the increased demand for care, now that more people have insurance. But part of it is the “gaming” of the rules that force insurers to offer coverage to all comers, regardless of health status.
The maximum fine for not buying insurance is $1,116, far below the cost of a private plan. So some people are plainly waiting until they face a major medical expense to buy — and then dumping the coverage as soon as the problem’s resolved.
The state says that the number of short-term insured tripled from 3,508 in 2006 to 17,177 in 2008 — and that the problem adds up to 1.5 percent to the cost of insurance for everyone else. Patrick and his allies are looking at limiting the periods when anyone can enroll to once or twice a year.
The state is also determined to force insurance companies to eat more costs. But that can’t keep happening, either: Most of the big insurers compromised on rates this year after a months-long fight — but the state Insurance Appeals Board had ruled that the original, higher rates were reasonable, given what insurers must pay to hospitals and doctors.
Tufts Health Plan CEO Jim Roosevelt spoke the obvious: If the state keeps insisting on making health insurance a money-losing business, it “will ultimately force insurers to go out of business or leave the market.”
The Bay State is pretty clearly on the road to becoming one giant HMO — though the new label is Accountable Care Organization. Since this is now supposed to be the whole nation’s future, it’s not too soon to start asking, “Accountable to whom?”