Tag: "Massachusetts"

Fixed-Dollar Tax Credits Would Reduce Individual Health Insurance Premiums

UntitledghgSonia Jaffe and Mark Shepard of the National Bureau of Economic Research (NBER) have written a new paper, which compares the effects of fixed-dollar subsidies for health insurance to subsidies that are linked to premiums. They conclude fixed-dollar subsidies reduce taxpayers’ costs and improve access. Unfortunately, the structure of subsidies in U.S. health insurance has moved in the other direction.

Tax credits that subsidize health insurance offered in Obamacare’s exchanges are based on the second-lower cost Silver-level plan in a region. Intuitively, this implies insurers will not compete too much because that would drive down subsidies. As long as subsidies chase insurance premiums, premiums will be higher than otherwise.

Jaffe and Shepard examine evidence from Massachusetts’ health reform (“Romneycare”), which dates to 2006. Its costs are still spiraling, and Jaffe estimates one factor is its design of subsidies, which is similar to Obamacare’s:

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Massachusetts Governor Hiking Taxes To Rescue Failed Health Reform

(A version of this Health Alert was published by Forbes.)

Governor Charlie Baker of Massachusetts has proposed a tax of $2,000 per worker on businesses which do not offer health coverage to employees who become dependent on Medicaid. This makes him the second Republican governor of Massachusetts to buy into the notion that imposing taxes (or fines or penalties or fees) on individuals and businesses can force them to accept responsibility for government failure at getting health spending under control.

image017bEvidence from Massachusetts and the nation shows the opposite is true. Yesterday, I testified on the effect of Obamacare’s individual mandate before the Oversight Subcommittee of the U.S. House of Representatives’ Ways and Means Committee. (The video is at this link, and my written testimony is at this link.)

I was joined on the panel of witnesses by Dr. John E. McDonough of Harvard University’s T.H. Chan School of Public Health. Professor McDonough was a central figure in Governor Mitt Romney’s 2006 Massachusetts health reform, where the individual mandate was first implemented. Governor Romney tried to label it a “conservative” or “Republican” idea. The spin was that the mandate characterized individual responsibility.

The reality is the mandate merely camouflages significant growth of government spending and control over health insurance. This has been the case in Massachusetts since day one: Spending has grown out of control despite many failed efforts to bend the cost curve.

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Hits and Misses

Medicaid Expansion Means More ER Visits

A number of years ago, Governor Romney told me that under Massachusetts health reform people would go to physicians’ offices for care instead of going to the emergency room. He wasn’t saying that Massachusetts would deliver more care. He was saying that the care would be more appropriate and less expensive.

As it turns out he was wrong. Traffic to the ER in Massachusetts today is higher than it was before the state’s health reform was enacted.

er23The same argument has been used by President Obama and by supporters of the Affordable Care Act. And now it turns out they are wrong too. As The New York Times reports:

The study, published in the journal Science, compared thousands of low-income people in the Portland area who were randomly selected in a 2008 lottery to get Medicaid coverage with people who entered the lottery but remained uninsured. Those who gained coverage made 40 percent more visits to the emergency room than their uninsured counterparts during their first 18 months with insurance.

This is consistent with our own predictions in an NCPA study done soon after the ACA was passed. Ah, if only they had listened.

Headlines I Wish I Hadn’t Seen

Headlines I Wish I Hadn’t Seen

How Similar is RomneyCare to ObamaCare?

Some features of the current Massachusetts law would be prohibited by the ACA. Massachusetts permits insurers to offer discounts to, for example, someone who works in a low-risk industry or participates in a wellness program. The federal law, on the other hand, requires premiums to be based on a single set of factors: family composition, the ages of covered members, tobacco usage, and geographical location. According to state officials, this will cause premiums to rollercoaster, resulting in “extreme premium increases” for many, and a decline for others.

A Pioneer Institute analysis found that 60 percent of small businesses in Massachusetts will experience a rate hike — for some the increase will be over 98 percent — due to this one regulatory change. These same employers are already bracing for the law’s 18 new taxes.

Source: National Review.

Headlines I Wish I Hadn’t Seen

Headlines I Wish I Hadn’t Seen

“Coverage Doesn’t Guarantee Access to Care”

That’s from Dr. Ronald Dunlap, president of the Massachusetts Medical Society. He’s commenting on a new survey showing:

The results are similar to last year’s survey that found 50 percent of family doctors and 51 percent of internists open to new patients in Massachusetts.

The average wait time for a non-emergency appointment with a primary care doctor in the latest survey is 39 days for family physicians, an improvement from 45 days last year. But the wait time to see an internist was 50 days, up from 44 days a year ago.