The Massachusetts Health Care Miracle

Massachusetts Taxpayer Association brings the happy faced:

the costs to taxpayers of achieving near-universal access to health care showed that the average yearly increase was only $88 million, well within original estimates. Because of health reform, employee-sponsored enrollment has grown by 150,000 and individuals private coverage by 40,000 adding at least $750 million in costs to Massachusetts employers. Critics ignore the fact that the fundamental problem is not the costs of Commonwealth Care but rather the unprecedented collapse of state tax revenues.

The Globe’s synopsis, today in the Opinion is this:

Its [MTA’s] report this spring put the cost to the state taxpayer at about $88 million a year, less than four-tenths of 1 percent of the state budget of $27 billion.

Now, first a small quibble.  It’s not a $27 billion budget; it’s $30 billion.

But to the more important, $88 million claim.  Let’s go to the numbers:

In 2009 Mass Care is covering 432,000 previously uninsured residents.  State outlays on these new insured grew by $409 million.  $947 per person of government subsidy.  A bargain, no?


First, notice the deception.  “It’s only $88 million.”  It’s not; it’s $88 million increase PER YEAR since inception and it’s now up to an extra $409 million. Per year.

Add to that $409 million, the increased federal spending in Medicaid reimbursement plus mandated individual fines for lack of coverage plus mandated employer payments in those cases where the employer doesn’t provide insurance plus the new cost to employers for new insureds.

Based on the MTA’s cost estimate, the cost to cover the uninsured is about $6,700 each.  For comparison, the average cost nationally of an individual policy is about $4,000.

It’s all in the detail of the MTA full report: costs are expected to increase by $2.1 billion in 2009. But fortunately, boasts the MTA, the Fed plus private employers are picking up the bill.

Whew!  Thank goodness the Federal government plus private employers are paying the difference, so that Mass taxpayers are “only” out $409 million this year.

But with the threat of Federal health care reform, the problem is this:  Massachusetts is the model and Massachusetts has successfully shifted the increasing cost to insure the uninsured to Federal Medicaid reimbursement and the private employer.  Meanwhile, there’s no indcation of costs decreasing.

Massachusetts Universal Care is expensive.  It was expensive before the Universal care and the cost increases haven’t abated. That’s our model!?

Why at the current costs of coverage, it would be cheaper to give every uninsured person a check for $4000 and tell him to buy private coverage.


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