Massachusetts "Connector" Health Plan May Not Be Connecting----Be Careful Washington

Before Washington legislators leap head-on into adopting the Massachusetts "connector" state sponsor health care program, they need to do the math and connect all of the dots---VERY CAREFULLY. 

Grace-Marie Turner, president of the Galen Institute, a health-care think-tank, is closely monitoring the Massachusetts model and raises some large red flags.

Here are some of her findings so far:

1. The majority of the newly covered are heavily subsidized by taxpayers.  Of the 330,000 new enrollees, at least 232,000 are getting free or heavily subsidized coverage.
2. The plan is a strain on the state budget in Massachusetts.  Gov. Deval Patrick (D) has asked for $869 million next year to fund the plan, but budget writers say the true costs are likely to be $1.1 billion. On top of that, the state is bracing for another 30,000-40,000 who have job based coverage now but could be added to the subsidy rolls as well. 
3. Health insurance rates continue to rise.  The state just approved a 12% rate increase for next year.  That alone could drive more people to seek state subsidized coverage which, in turn, will have a snowballing impact on the state budget.
4. Some safety-net hospitals are threatened with bankruptcy because they are still treating large numbers of uninsured people.  The problem is their compensation rates have been cut by the reforms.
5. The state is having a hard time convincing people who don't get the subsidy to buy insurance especially as rates go up.  The government is even telling people what they can and cannot afford and threatens fines as much as $1,824 for a couple who don't buy the mandated insurance.  For example, if your family income in Massachusetts is $70,001, the state says you can afford to spend $550 a month, or $6,600 a year, for health insurance.  Try spending that much if a family has three or four children.  Again, if you don't buy it or don't get a waiver, you fork over $1,824 in fines, which will increase next year.

Is the grand Massachusetts government scheme reducing the number of uninsured?  Check our Grace-Marie's link for the answer.

AWB wants people to have affordable access to health care and insurance.  That's why we, and other associations, negotiated an association health plan bill which overwhelmingly passed the legislature with bi-partisan support in 1995 and with the strong blessing of then Gov. Mike Lowry (D). They are working and covering over a half-million people in our state of which 40% could not afford health care before. They are part of what is working in Washington and target small businesses who employ around five people.

In surveying our members, we found that well over 9 in 10 private sector job-provides who belong to the Association of Washington Business want to continue to provide health coverage for the people who work for them.  Health insurance and good benefits are keys to keeping good workers. 

There is a role for government and a role for insurers in providing health care.  Finding the proper balance is key.  We need to build on what is working and fix what is not.  Legislators need to look back and remember the massive landslide set off by the last round of state directed universal reforms.  That year was 1993 and there are lessons learned that should not be repeated. 

Do the math and connect the dots.  Grand schemes for universal care are complex and costly.  They tend to collapse on their own weight. Just check out what is happening in California.

Don C. Brunell (DonB@awb.org)