Ezra says mandates lower costs.
Kill the individual mandate and you're probably killing the bill, too. The mandate is what keeps average premium costs low, because it keeps healthy people in the insurance pool. It's why costs have dropped in Massachusetts, not jumped.
The full report upon which Ezra makes that claim, out of MIT, is here (DOC):
The major aspects of this reform took place in 2007, notably the introduction of large subsidies for low income populations, a merged non-group and small group insurance market, and a mandate on individuals to purchase health insurance. And the results have been an enormous reduction in the cost of non-group insurance in the state: the average individual premium in the state fell from $8537 at the end of 2006 to $5143 in mid-2009, a 40% reduction while the rest of the nation was seeing a 14% increase.
Sounds impressive! Except that it's not that simple, according to figures (PDF) from the Massachusetts Division of Health Care Finance and Policy.
The individual market in Massachusetts, for which that claim is based, grew from 40,000 to 89,000 subscribers, and yes, prices for that market have dropped 40 percent. Yet it is still twice the price of the national average. And more notably, it was only 0.8 percent of the market before reform, and 1.6 percent of the market, afterward. In other words, in a tiny sliver of the health care insurance picture in the Bay State, the situation went from the worst in the nation to merely one of the worst in the nation.
There is Commonwealth Care, which appears to be a publicly subsidized exchange. It has 177,000 subscribers, or 3.2 percent of the insured. Its premiums have increased between 18 and 20 percent in that time period, depending on the plan chosen (page 18 of that PDF).
Then there is MassHealth, which is much bigger at 804,000 subscribers, or 14.7 percent of the population. It is essentially Medicaid and SCHIP -- a government run health program. No per-insurer cost numbers are readily available.
Finally, there are individuals in private health insurance -- 4.416 million subscribers, or 80.5 percent of the total. I haven't been able to find 2009 data, but in 2007, the average annual health insurance premium for plans offered by employers was $12,324. In 2008, it was $13,788, or 12 percent. Chances are, increases in 2009 exceeded the two percent needed to match the national average increase of 14 percent.
Three percent remain uninsured.
So to recap, of the entire state of Massachusetts, we have full 2007-2009 premium data for about 5 percent of them. One-third of those had their premiums drop 40 percent, but still pay double the national average. The other 2/3rd had their premiums increase 20 percent. In group plans, we know that just between 2007 and 2008, premiums increased 12 percent.
So what's going on? You're going to love this -- the Massachusetts plan lacks cost controls.
In Massachusetts, brokering the 2006 overhaul was such a delicate and years-long undertaking that the disparate interest groups - insurers, businesses, consumers, hospital and doctors organizations - all agreed to first tackle health coverage expansion and leave the cost question for a later date.
Now, the Commonwealth Fund report projects that without significant cost reforms, an annual family premium in Massachusetts will soar to $26,730 by 2020.
So we have one example of a state with mandates, but no cost control. And the results, thus far, aren't encouraging. Monopolies don't make a habit of passing on the savings to consumers without being forced to by 1) government regulations, or 2) real competition. We have neither in this Senate bill.
But it's worse than even that. Remember how only three percent of residents lack health insurance? Kaiser Family Foundation finds that having "health insurance" isn't the same (PDF) as having health care:
[T]he affordability of health care remains a barrier to receiving care for some residents. Of the total population, 21 percent went without needed care in the previous year because of cost.
Part of the reason is that soaring costs (the ones that were never contained), are already forcing major cuts (PDF), according to Physicians for a National Health Program:
In order to bring the state’s cost increases down from 15.4% to 9.4%, the plans boosted co-payments and enrollee contributions, making services even less affordable for the near-poor families enrolled in Commonwealth Care.
So not only does a mandate-centric health "reform" plan not control costs, but also continues to leave people it pretends to cover in the dust, too poor to afford steep co-pays and deductibles. Bravo, Senate Democrats. It's hard to see how you could screw this up any worse (though Ben Nelson will try his best with Stupak II).
The bottom line in Massachusetts? From the Kaiser report:
In addition, rising health care costs continue to challenge the sustainability of the program.
You pass a shitty program now that further bankrupts our nation, and we won't be talking about "fixing" it in a few years, but whether it should even exist.
(Jed Lewison contributed to the research in this piece.)
