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Over the past few days, Erza Klein and Jonathan Cohn among have debunked the claims by Avik Roy of Forbes that Obamacare will produce a "rate shock" in California. As they noted, Roy conveniently ignored the fact that many people individual market cannot currently buy insurance at any price, let alone at the "teaser" rates insurers use to lure new buyers. Just as important as Roy's omission of the estimated 22 percent nationwide who are now rejected for pre-existing conditions was his skipping over Obamacare's new subsidies that will make coverage affordable for millions more.

Now, a new poll is repeating many of the same mistakes and producing many of the same kinds of frightening Obamacare headlines. Pointing to a survey commissioned by InsuranceQuotes.com, CNBC reported "Two-Thirds of Americans Don't Know If They Will Insure Under Obamacare," while The Atlantic Wire fretted, "What If Healthy People Don't Want to Buy Obamacare?" As it turns out, all the misinformation and hysteria could largely have been avoided if all involved simply looked at Massachusetts, where a virtually identical health care reform law is now in its seventh year. After all, 98 percent of residents there now have health insurance, while the number paying the penalty instead was just 44,000 out of 6.6 million people by 2010.

Already getting their insurance through their employers or from government programs like Medicare and Medicare, most Americans will be unaffected by the looming Jan. 1, 2014 enrollment deadline. For its part, InsuranceQuotes.com explained that "many consumers aren't clear on eligibility requirements for these health care subsidies. In fact, the survey showed that 58 percent of Americans aren't sure if they'll qualify for help with their health insurance premiums." But thus far, the media has seized on this nugget:

A new survey shows almost two-thirds of uninsured Americans still aren't sure whether they'll comply - and many are confused about whether they'll be eligible for tax credits to help pay premiums.[...]

The survey reveals that 64 percent of the uninsured say they haven't decided whether they will buy health insurance by Jan. 1, 2014, as required by the Affordable Care Act (ACA), which is also known as Obamacare.

Only 19 percent said they will get coverage by the deadline, while 10 percent said they plan to stay uninsured and pay the penalty, which in 2014 is the greater of $95 or one percent of income for an adult.

Of course, that didn't happen in Massachusetts. In 2011, the National Bureau of Economic Research (NBER) released a study showing that 2006 Massachusetts health care reform was in fact making Bay State residents healthier. Importantly, the authors noted that "the general strategies for obtaining nearly universal coverage in both the Massachusetts and federal laws involved the same three-pronged approach of non-group insurance market reforms, subsidies, and mandates, suggesting that the health effects should be broadly similar." But as I explained last year, the same should be true about the small numbers of people forecast to pay penalties rather than buy health insurance as mandated by the Affordable Care Act:
As you will recall, the Affordable Care Act is forecast by the nonpartisan Congressional Budget Office (CBO) to reduce the U.S. national debt. It does this in part through $500 billion in new tax revenue over 10 years. But as it turns out, penalties for noncompliance with the individual mandate to purchase insurance represent only a small fraction of those funds. The CBO estimates only 4 million people (less than 2 percent of the population) will pay that penalty, producing just $65 billion in the first decade of the law.

Which is very similar to the experience in Massachusetts, where six years ago Governor Romney signed what MIT professor and adviser Jonathan Gruber called "the same f--king bill." Enjoying the consistent support of Bay State residents by a 2 to 1 margin, the bill Governor Mitt Romney signed into law lowered the uninsured rate from around 10 percent to a national low of two percent [...] And as it turns out, only 48,000 Bay State residents out of a population 6.6 million opted to pay the penalty ranging from $228 to $1,212 a year rather than acquire health insurance under Mitt Romney's version of the individual mandate. That's less than half the national rate projected by the CBO.

Of course, you don't have to take my word it. As the New York Times and AP ("In Mass., individual mandate sparks little outcry") reported last year during the 2012 presidential campaign, fears about affordability and non-participation in the state with the nation's highest insurance premiums did not come to pass. As CBS report on Romneycare's sixth anniversary described the case of 61 year old Mary Flynn, who lost her health insurance after she left a corporate job to start her own business:
"I was totally scared. I didn't know what I was going to do," she said.

She found that her lower income made her eligible for a subsidized plan that now costs her nothing.

Still, insurance premiums in Massachusetts have increased from an average of $331 per month in 2006 to $401 per month in 2010.

In Massachusetts, there is not just an individual mandate to buy insurance, there is also an employer mandate to provide it, and employers do for 79 percent of Massachusetts residents, up ten percent since health reform was implemented, bucking the downward national trend, whereby only 60 percent of employers nationwide provide health insurance.

The penalties for individuals not enrolling in a plan range from $19 a month to a maximum $105, depending on income. People earning less than $16,345 a year are exempt from the mandate. The fine is no more than $58 per month for those earning up to $32,676 per year. Above that, refusal to enroll leads to the $105 bill.

Every year, the number of Massachusetts residents opting out of health insurance has shrunk from 67,000 in 2007 to 44,000 in 2010.

The supposed Massachusetts rate shock didn't materialize, either. While slightly higher than the national average between 2006 and 2010, for 2012 state regulators said rate increase would be only 1.2 percent. And the Boston Globe reported three weeks ago, the trend is continuing. "Health insurance base rates will rise an average of 2.5 percent for Massachusetts small businesses and individuals renewing their policies July 1. The increase is slightly smaller than the 2.7 percent average base rate hike for policies renewed in the current quarter."

And that's not all. As the CBS story suggests, far from dropping insurance coverage for employees, Massachusetts employers added more. As a PriceWaterhouseCoopers analysis found, after passage the Massachusetts law, workers who passed up employer plans previously decided to opt in, while employees at firms lacking coverage soon demanded it.

To be sure, the national Affordable Care Act and the Massachusetts law are not exactly the same and different states are differentially situated. As the Washington Post explained, "Massachusetts is a relatively rich and liberal state that already had a fairly high rate of health insurance." And there's another reason why "the Massachusetts experience might not prove an apt guide to the national experience":

Although the Massachusetts reforms are architecturally similar to the Affordable Care Act, they didn't have to contend with a political party working relentlessly to undermine their implementation.
That, and conservative propagandists pretending Massachusetts' success never happened.

Originally posted to Jon Perr on Mon Jun 03, 2013 at 02:09 PM PDT.

Also republished by Massachusetts Kosmopolitans.

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Comment Preferences

  •  There's pitfalls you won't know about (1+ / 0-)
    Recommended by:
    SoCalSal

    I'm a Mass. resident that became disabled last winter.  My health insurance from my old job ran out on May 31.  I went in to the MassHealth enrollment office May 13, figuring three weeks was plenty of time.  Well, it isn't.  Apparently it takes 4-6 weeks to get MassHealth, even in a case like mine where I've already been approved for SSDI. There's at least one blood test, two perscriptions, and one or two dr. appointments in June where I will have a problem due to how long it takes to get MassHealth approval.  So in all cases, make applications WAAAAAY in advance of when you need them.

    Hic Rhodus, hic salta!

    by ActivistGuy on Mon Jun 03, 2013 at 03:18:13 PM PDT

    •  MassHealth is not really part of Romneycare but (2+ / 0-)
      Recommended by:
      FloridaSNMOM, splashoil

      That is the name of the MA Medicaid program that existed before that

      However, when you get MassHealth it may be retroactive to the application date. At least check this out. And if one of the well meaning but irratically informed minions isn't sure or says it isn't, call back one more time and ask same thing of another person. Be sure you say you are on disability and have important doctors appts you can't put off. THis shoudn't change what the answer would be but it helps to focus their mind.

      I think it is retroactive to apply date BECAUSE
      -I'm on disability with MA health. Two years of the last decade or so I got in my yearly renewal form in late and my MassHealth had expired. I freaked. But I reached a compentant person eventually and they said that when I renewed--which was reapplying pretty much-and got it it would be retroactive.

      SO there is at least a solid chance there would be for you.
      AND also, if it's at a hospital or office affiliated with one,if you have not already you should call or go to social services office (find out where MassHealth enrollment is done in that hospital). They can tell you what will happen. IF for example MassHealth is not retroactive to application date, you may be eligible for some sort of free care. If you have MassHealth or expect to get it your income is low. I'm thinking if they no longer have free care since Romneycare started, they must have figured out a "patch" for people like you who fall into the temporal crack (patch may be that retroactive-to-application date thing)

      So lets hope that it's too soon to call that entirely a pitfall. I have to say, I'm surprised you think three weeks would be plenty of time..perhaps you are not used to applying for such programs. It took months to get disabiity, at least for me. Every program I've had to apply to takes longer than three weeks. You say you are relatively recently disabled. THough in MA low income people and disabled are treated with dignity around healthcare unlike some places, the wait for coverage in support programs is long.

  •  Over 55 & Poor? (0+ / 0-)

    You are automatically enrolled in Medicaid!  It's a "Collateral Loan and Estate Tax upon Death."  Obamacare uses the "clawback," to have your State recover the costs of your care.  A Collateral Loan:

    ... You won’t find the following info in the ACA. It’s in the Omnibus Reconciliation Act of 1993 (OBRA 1993) – a federal statute which applies to Medicaid, and, if you are enrolled in Medicaid, it will apply to you depending on your age.

    a) OBRA 1993 requires all states that receive Medicaid funding to seek recovery from the estates of deceased individuals who used Medicaid benefits at age 55 or older. It allows recovery for any items or services under the state Medicaid plan going beyond nursing homes and other long-term care institutions. In fact, The Centers for Medicare & Medicaid Services (CMS) site says that states have the option of recovering payments for all Medicaid services provided. The Department of Health and Human Services (HHS) site says at state option, recovery can be pursued for any items covered by the Medicaid state plan.

    b) The HHS site has an overview of the Medicaid estate recovery mandate which also says that at a minimum, states must pursue recoveries from the “probate estate,” which includes property that passes to the heirs under state probate law, but states can expand the definition of estate to allow recovery from property that bypasses probate. This means states can use procedures for direct recovery from bank accounts and other funds.

    c) Some states use recovery for RX and hospital only as required by OBRA 1993; some recover for a few additional benefits and some recover for all benefits under the state plan. Recovery provides revenue for cash-strapped states and it’s a big business.

    Wouldn't we just have been better off with Single Payer?
    Relentless Creation of Second Class Citizens
    •  Obama's and Pelosi's kids go to private school... (0+ / 0-)

      free does not mean BETTER, heck, free does not even mean FREE!  For example, the Obamas and the Pelosis had a chance to send their children to FREE public schools, they however chose to PAY to send them to a private school.  Why would they do a thing like this? Because they want the BEST for their children, and paying for private school provides their children with a better education.  The Obamas and the Pelosis would treat health care the same way they treat education.  They would NEVER enroll their children in Medicaid because it is inferior to the PRIVATE insurance system.  The great thing about Obamacare is that it allows middle class people to get subsidies in order to buy private health care insurance!  

      Medicaid is "free", but because it pays doctors less than private insurance the health outcomes are not nearly equivalent to the outcomes of people with private insurance.  My problem with Obamacare is that it expands Medicaid, most likely at the expense of people that REALLY need Medicaid.  Luckily Justice Roberts, Governor Perry, and Governor Jindal are working to allow more people to enter the superior health care exchanges.

  •  Replace Obamacare with Single Payer! (0+ / 0-)

    It's time to call it for what it is not.  It is not a solution or even a step forward.  The sooner we stop fluffing it into something it is not the better.  This time we should waste no time with bogus " public options" and move toward Single Payer.

  •  comparisons with Massachusetts (0+ / 0-)

    Overall this article has some misleading information about Massachusetts. Here's one example. The author of this blog post says an hysterical new survey shows

    "almost two-thirds of uninsured Americans still aren't sure whether they'll comply - and many are confused about whether they'll be eligible for tax credits to help pay premiums.[...]

    "The survey reveals that 64 percent of the uninsured say they haven't decided whether they will buy health insurance by Jan. 1, 2014, as required by the Affordable Care Act (ACA), which is also known as Obamacare.

    "Only 19 percent said they will get coverage by the deadline, while 10 percent said they plan to stay uninsured and pay the penalty, which in 2014 is the greater of $95 or one percent of income for an adult."

    "Of course, that didn't happen in Massachusetts."

    Actually that is almost exactly what has happened in Massachusetts. Almost 200,000 people, half of the people entitled for free  or almost free health insurance, don't bother to sign up. That percentage has been pretty steady since RomneyCare fully went into effect. The blogger notes that only 45,000 people pay the penalty (not sure what the source of that is because it doesn't agree with state report but close enough for govt work?) but he doesn't tell you that almost as many (as many according to the state) get a pass from the state that says they don't have to be insured even though they have more than poverty-level income. (Does Obamacare have that option?). This is info from the Massachusetts Department of Revenue.

  •  Another sort-of error about Massachusetts (0+ / 0-)

    The author of this post quotes the Boston Globe:

    "Health insurance base rates will rise an average of 2.5 percent for Massachusetts small businesses and individuals renewing their policies July 1. The increase is slightly smaller than the 2.7 percent average base rate hike for policies renewed in the current quarter."

    The key word is "base rate."  No one pays base rates. Premiums go up based on your age, occupation and where you live in the state. So unless you somehow magically didn't get a year older, you're premium goes up 10% or more.

    The second most important words in this paragraph are "Massachusetts small businesses and individuals."  The category covered by the state price fixing is only about 10% of the population. The four major insurers who make these deals then turn around are jack up the prices whatever they market will bear on the rest of us to make up for the state's premium price fixing.  

    (I say "sort of error" because the statement is accurate,  but misleading.)

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