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POLICY: Massachusetts Health Plan Update By Eric Novack

Those of following along with the attempts to provide comprehensive health insurance under current market conditions in Massachusetts under the ‘Connector’ concept, are aware that former Governor Romney and the legislature was aiming for an average policy to cost $200 per month. Never mind that the average policy up to this point in Massachusetts was over about $420 per month.

Well, Governor Romney is out and the first round of bids came in, averaging $380 per month. Shocking.

So new Governor Patrick and the health commission sent the insurers back to the drawing board to see what round 2 would bring, even considering proposals that might limit or exclude prescription drugs.

Last week, the Governor and the Boston Globe presented a breakthrough.  To read the headlines, you would think that success had been achieved.

But wait, get to paragraph 10. The average plan now is $305 per month.  A significant improvement, to be sure, but hardly what Partners Health Care CEO called being “back in the ballpark”.  The $305 rate is still 50% higher than what was intended, and we really do not know exactly what restrictions are being placed to get the lower rates.  And just wait until the purchasers of the new plans start bumping into the restrictions.

Other criticisms about the plan have been chronicled here and elsewhere before and again.

Prediction: By New Year’s 2008, few will be happy to claim ownership of the Massachusetts Health Plan—other than the appointed bureaucrats and their minions.

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4 replies »

  1. As I had predeicted when the MA plan first was introduced with a $200 planned premium – it was only a political initial price teaser. Well the truth is coming out as these so-called universal health reform plans are really the same old high priced insurance plans just repackaged with a mandatory premium feature. People don’t get it yet – IT’S THE PRICES STUPID! Universal single pay with meaningful cost controls is the only real long term solution.

  2. As we look at these reform proposals and effort, we need to hold a score card on the extent to which they include what I would call not reforming but “transformative” characteristics. By transformative I mean to what extent is the plan shifting the perverse incentives to do more (to the point of doing harm as Wennberg has shown). At the primary care level this means attacking bad health and poor health choices with the same aggressiveness that wars on cancer and against terrorism are engaged in our culture – with the same use of whatever bully-pulpit can be found. This of course means an aggressive reform of medical school education to support this shifting of investment in what we then offer and pay. All huge. But without scoring well on the transformation indices, we’ll not be finding our way out of these woods. Without transformative thinking, we will have short term gains, maybe, but the deck chairs will eventually slide back into their normal locations ….

  3. “universal coverage plans that do not dramatically attack the bloated cost structure and perverse incentives”
    I don’t see how they even weakly attack such factors.
    This plan is insurance, not health care reform. People who believe it’s health care reform are distracted by an old Yankee trick: he stuck a feather in his cap, and called it macaroni. Now it appears Gov Patrick is whistling the same tune. New boss, same as the old boss . . .

  4. All this fuss is so sadly avoidable if people would just take a look at what American health care expenditures go to pay for. The Massachusetts plan doesn’t reform the cost structure or cost drivers of health care in any serious way. So at most you’re going to shave off a couple of percentage points from the rates you’d see for commercial plans with the same benefits. From what I’ve read, it looks like all the cost reductions are coming from three sources (1) smaller networks with deeper provider discounts, (2) lower benefits (including an option without Rx this time), (3) lower profit margins for the managed care companies. I think convincing plans to lower margins is what all the personal interventions from the governor were about, but it really only could have amounted to a couple of points out of the 20% reduction. The rest of it came from smaller networks and more cost-sharing. And it’s not much lower than the rate you’d get for commercial plans that looks the same.
    What this reaffirms is that universal coverage plans that do not dramatically attack the bloated cost structure and perverse incentives that drive expenditures above the rate of economic expansion are not affordable. It doesn’t matter whether the system is single-payer or multi-payer. Medicare for all won’t be any better.

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