Two years ago lawmakers in Massachusetts made the state the first in the nation to mandate that residents purchase health insurance. The proposal quickly caught on, inspiring similar efforts on the state level and eventually becoming the blueprint for the national health reform efforts of Democratic presidential candidates Sen. Barack Obama and New York Sen. Hillary Rodham Clinton.
More than a year into the experiment the first returns are in. And reviews are mixed. Not surprisingly, the program is costing far more than backers had initially predicted. On the other hand, the ranks of the uninsured in the state have dropped sharply. (See Matthew’s podcast with Jon Kingsdale, executive director of the Massachusetts Connector, the agency created to administer the program, for more on the back story.) The Massachusetts experiment is clearly not something to be dismissed — nor is it something to
defend for the sake of argument.
In brief, the Massachusetts health care reform law appears on its way to:
- Covering two-thirds of those who did not have health insurance on the day it was enacted — about 400,000 people by the end of 2009.
- Covering most of those who were uninsured in households with incomes below 300 percent of the federal poverty level–below which the plan pays all or most health insurance premiums.
- Offering health insurance plans to middle-income people that are still largely unaffordable for those families making less than $110,000 a year –– people for whom the state has generally canceled the individual mandate that they must buy coverage.
- Racking up costs well above what was first estimated. The plan looks to be coming in 38 percent higher than originally estimated for its first year and the Governor is now estimating second year costs 50 percent higher than the original estimate –– from $725 million to $1.1 billion for the 2008-2009 fiscal year.
- Developing an annual cost trend for the program’s insurance programs, Commonwealth Care and Commonwealth Choice, in the 10 percent to 15 percent range.
So, lots more people, particularly lower-income residents, are covered but the program’s costs are unsustainable.
Massachusetts was a bold and very difficult piece of legislation to
accomplish. It has often been described as an experiment. The greatest
contribution experiments make is to tell us a lot about what works and
what doesn’t so we can move on successfully from there.
Massachusetts policymakers will now work to improve the plan. But
without a major cost containment effort — way beyond anything they are
even talking about now — they won’t make much progress.
The Massachusetts plan closely parallels Barack Obama and Hillary Clinton’s national
health reform plans. Whatever happens next in Massachusetts likely now undermine both state and federal
attempts to copy it. Neither Congress or any state legislature is
going to embark on a plan whose costs have quickly become so
problematic for such an incomplete result.
Now before all my readers in the Bay State quickly complain I’m
deriding the Massachusetts plan again, let me be clear that this is not
a bad outcome. If there has been one primary frustration in the health
care debate since the 1960s it’s that we too often just debate things,
never try anything, and never build on our successes and failures.
The Massachusetts health reform law is valuable because it tells us so much.
My primary takeaway from the Massachusetts health reform law is that
attempts to incrementally deal with access first, while avoiding a
major restructuring of the system to simultaneously deal with costs,
will only lead to an incomplete result in improving access and costs
that cannot be sustained.
What Massachusetts has accomplished in passing this law is the most
any state or Congress could have done — or ever did. As I have said many
times, the political leverage just hasn’t been available
to do the job in full. That was true in 2006 when this law passed
and it’s true even today.
But in the coming months, results from the Massachusetts health care experiment are going to become well known.
While many will say, "Look at that cost mess let’s forget major
health care reform." I would hope more people would say, "It’s clear we
are going to have to take a more fundamental look at real health care
reform that cuts across both the access and cost-containment lines."
Even bolder plans, that everyone says are politically impossible
today, just may take on a new life because it will be clear the
Massachusetts outline isn’t going to do much more than bust the budget
for an incomplete result. Moving the debate to a more viable place
would be a very worthwhile contribution for Massachusetts to make.
A few weeks ago, I said watch the Wyden-Bennett health care plan. It
combines many of the things conservatives want — a decoupling from the
employer-based system using an individual defined contribution
model — with many of the things liberals want — adequate premium support
for consumers and open access for everyone. The fact that the CBO rated
Wyden-Bennett revenue neutral early in the game also looks pretty good
in light of what’s happening in Mass.
Other fresh ideas are on the table. Ezekiel Emanuel’s health plan,
for example, that also decouples health care from the employer, puts
private health insurance in the hands of the consumer, and substitutes
the many ways we pay for health care today with a single VAT tax that
automatically creates a national budget for health care expenditures,
has also gained lots of attention.
The National Leadership Coalition on Health has had a comprehensive
plan on the table for sometime. Its bipartisan approach and many
supporters from a broad cross section of the stakeholders also makes it
a serious proposal that could now get more attention.
To me, progress is a matter of keeping the debate moving forward toward a successful outcome by building on valuable experiences.
That, I will suggest, is what the Massachusetts experiment can now