Bettin on SCOTUS and Reform, Part Deux: Myths from Massachusetts

April 14th, 2012 | Healthcare Reform | Seminars & Publications

The insurance reforms described in my previous post are, as Mr. Clement argued, at the heart of the Reform.  The theory of the individual mandate is that to achieve the actuarial stability necessary to make the insurance reforms work, you have to force people to buy insurance.  And, of course, that is what they did in Massachusetts, right? 

 Well, yes, but it did not generate any actuarial stability, to be sure.  As we saw in the previous post, aside from technically moving some Medicaid recipients out of that program and into the health insurance pool pursuant to a federal waiver from the usual Medicaid entitlement, only 39,767 people as of late 2011 were covered in the new Exchange-sponsored insurance, slightly more than .5% of the state’s population.  And of course, there were some others who found their way into the ‘normal’ insurance market outside the exchanges.

 What really happened is that the Massachusetts reform destabilized the actuarial balance of the small group insurance market, leading to a period of dramatic premium increases!  Simultaneously, the large group and self-insured market, big supporters of the legislation and appointees to the boards and commissions described below, escaped the cost of the Reform – what a surprise.  The attack on small business was only recently abated, of necessity, during the 2010 reelection campaign of Governor Patrick against a former health insurance executive.  Governor Patrick is now one of the many co-chairs of President Obama’s reelection campaign.  An increasing crescendo of complaints and outrage among small business at premium increases of 25% or more per annum, led by the Massachusetts Retailers Association, and supported surprisingly enough by the state’s own quarterly analysis of the results of its reform set the stage for 2010 legislative hearings.  Massachusetts Attorney General Martha Coakley’s investigation into the contractual relationships between healthcare providers and insurers added fuel to the fire. 

 Supporters of Massachusetts reform and the federal reform like to point to the drop in premiums for the individual market – the typical citation in Massachusetts is that those premiums dropped by 33%.  What the supporters never say, although the state government’s statistics clearly state it, is that premium decrease was absorbed by the insureds in the small group market!  Not surprisingly, there is not a single representative of small business (which the state defines as 50 or fewer employees) on the board of the Health Connector nor on the state’s Special Commission on Provider Price Reform. This almost pathological disregard of, and disrespect for, small business is the underlying premise of the chapter in my new book on Romneycare.

Decide for yourself:

Read about my book here: http://www.cpa.net/publications/financial-professionals-guide-to-healthcare-reform/

Read Attorney General Coakley’s Report here: www.mass.gov/ago/docs/healthcare/2011-hcctd.pdf

Read about the Special Commission on Provider Price Reform here: http://www.mass.gov/eohhs/gov/commissions-and-initiatives/provider-price-reform/members.html

Read about the Connector Board here: https://www.mahealthconnector.org/portal/site/connector/menuitem.1f234617384794635734db47e6468a0c

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