Tuesday, January 19, 2010

The Massachusetts health care model

Cato is looking at the Massachusetts health care plan which is, in many ways, a model for the Democrats. I've been arguing for a while that we should take advantage of our federalist system when it comes to health care. Let's look at states where they have tried such plans and evaluate how successful they've been. And the evidence from Massachusetts is not promising. Here are some of Cato's findings.
* 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.
Is this really the model that we should be following for the entire country? Perhaps that is one of the reasons why Scott Brown was able to surge to being on the cusp of a historic victory by campaigning to be the 41st vote to block this Democratic plan. As Soren Dayton wrote at Red State, the Massachusetts voters have an opportunity to vote against Massachusetts Care tomorrow and it looks like they might be doing so. Results such as these aren't ones that we should want to emulate.
For the state’s policymakers, rapidly rising health-care costs are the central problem with the plan. Since 2006, the cost of the state’s insurance program has increased by 42 percent, or almost $600 million. According to an analysis by the Rand Corporation, “in the absence of policy change, health care spending in Massachusetts is projected to nearly double to $123 billion in 2020, increasing 8 percent faster than the state’s gross domestic product (GDP).”

Meanwhile, the cost of insurance premiums in the state is the highest in the nation, and double-digit rate hikes are expected again in 2010.

The worry, shared across the political spectrum, is that the state’s health-care spending will overwhelm the state’s budget. Already, it has forced service cuts that have irked those on both sides of the aisle.

Physicians for a National Health Plan, a doctor’s group that supports a fully socialized, single-payer health-care system, warned in a February 2009 report that the new system had failed to reduce medical spending, and has subsequently drawn funding away from crucial health resources such as emergency room care.
The fact that the Democrats have put together a plan that is similar to Massachusetts' plan without considering all these drawbacks should tell us all we need to know about how thoughtful they were in designing it.