Thursday, October 2, 2008

Feds Prop Up Massachusetts Plan

The September 30, 2008 New York Times reports that the federal government is pumping still more money into the Massachusetts plan to keep it from failing:
Gov. Deval Patrick announced in Boston that the state and the federal Centers for Medicare and Medicaid Services had negotiated the extension of a waiver that enables federal financial support for the state's subsidized coverage plan. The agreement will allow the state to spend up to $21.2 billion on the program over the next three years, an increase of $4.3 billion over the initial three-year period.
This is the plan that is so expensive that middle-class residents (e.g., a family of four making $63,000 per year) needs subsidies from the state to afford the state-mandated insurance.

The October 1, 2008 Boston Globe also reports a similar story, although it gives somewhat different figures:
...Massachusetts will be able to expand its first-in-the-nation healthcare law because of a federal promise of $10.6 billion over the next three years, Governor Deval Patrick said
The state is also adding more mandates onto businesses:
Under the new rules, the larger companies would have to pay 33 percent of their workers' premiums within 90 days of hiring and make sure that at least 25 percent of their workers are covered by the plan. Otherwise, the employer must pay a $295 fine per worker.

Businesses with fewer employees would still be allowed to follow the old rules, Bigby said, and meet only one of the two requirements to escape the penalty.
This is sure to drive even more businesses out of state.

Supporters of the Massachusetts plan like to claim that it has reduced the number of uninsured in the state. But it's cost hundreds of millions of dollars more than promised, and many of the newly insured don't actually get the care they need -- they have "coverage" but not care.

The NYT article also notes that Massachusetts officials admit that the plan might fail without the new deal made with the federal government.

If the federal government adopted a similar plan, who would bail out the US?