Thursday, April 17, 2008

Costs Keep Rising in Massachusetts

More reports are coming from the national media on problems with Massachusetts-style mandatory health insurance. Here are some excerpts from this April 12, 2008 Associated Press story:
Costs soar for Mass. health care law
By STEVE LeBLANC, Associated Press Writer

BOSTON - Two years after the state's landmark health law was signed, the cracks are starting to show.

Costs are soaring and Massachusetts lawmakers are weighing a dollar-a-pack hike in the state's cigarette tax to help pay for a larger-than-expected enrollment in the law's subsidized insurance plans.

...Anyone earning more is required to get health insurance through their employer, on their own, or by purchasing lower-cost plans through the Health Care Connector, the independent state agency overseeing the law.

Businesses are also on the hook. Those with 11 or more full time employees who refuse to offer insurance face $295 annual penalties per employee. Already, 748 employers have failed to meet that threshold and have paid $6.6 million to the state.

Rick Lord, president of the Associated Industries of Massachusetts, said the state must be "very mindful of placing burdens on businesses that don't exist in other states."

...Michael Tanner, a senior fellow at the libertarian-leaning Cato Institute, said the law has been an unqualified failure.

Tanner was critical of the connector authority, a "super-regulatory agency" which has mandated levels of coverage. He also noted the vast majority of the newly insured are receiving subsidized care.

"They said it would get us universal coverage and reduce costs and it's done neither," Tanner said.

The biggest challenge is rising costs.

In 2006, a legislative committee estimated the law would cost about $725 million in the fiscal year starting in July. In his budget, Patrick set aside $869 million, but those overseeing the law have already acknowledged costs will rise even higher.
Even the very liberal California state legislature rejected a similar plan back in January 2008, on the grounds that it would cost too much. As more people around the country are realizing that the Massachusetts plan is a bad idea, Colorado should not rush headlong to embrace it. (Via Thrutch.)