Massachusetts Gets the Gold for Health Insurance Cost!

(This is an example of when #winning is actually a big #fail – promoted by Rob “EaBo Clipper” Eno)

However, this gold medal is one we wish we could return. Kaiser Family Foundation released a report that captures the wide ranging differences in health insurance premiums across the country. Massachusetts led the pack with an average individual insurance premium topping $437 per person per month. This is almost double the national average. (According to state figures, the average monthly cost for a family is $1,189 or $14,268 a year.)

It should be noted that the Kaiser report does acknowledge the many factors that lead to high insurance costs, such as cost of living, patient cost-sharing, generosity of benefits, the base cost of care, age-based demographics, and cost control efforts. As a result, most of the Northeast is considered expensive.

From a local perspective, this report should be juxtaposed with news this week that health insurers accepted “less than adequate rates” for increases in premiums for small businesses and individuals. While at first blush we want to cheer this relief for small companies, the victory is a mirage. Because of political pressure, insurers under priced their plans this year, but will most likely pass on the cost to other customers or back to small businesses in future years. This is not a solution to the health care cost problem, but unfortunately this point is lost on most of the Legislature and the Governor.

From a national policy perspective, the Kaiser report is interesting because it will provide a baseline to measure changes in premiums after Obamacare is fully implemented.

I have written numerous times about the concern of “insurance reforms” being forced down on other states and resulting rise of prices in those states. In the Commonwealth, there is a real lack of understanding by policy makers in regards to how market regulations, such as guarantee issue, coverage mandates, and community rating can increase the cost of insurance. Other states are about to find out in 2014.

The Democratic Congress included in the ACA these “market reforms” and a recent report out of the Office of the Actuary in the Centers for Medicare and Medicaid Services, highlighted in their annual projections the continued upward trend in national health care spending. The report projected that Obamacare will dramatically increase the growth rate of health care spending in the near-term.

The growth rate by 2014 will approach 14 percent, compared to 3.5 percent, if Obamacare had never been implemented. This graph appeared in the July issue of Health Affairs and illustrates the point. Blue is without Obamacare, Red is with.

 

CMS projections

 This certainly will call into question the President’s 2008 claim that “Under [our] plan, if you like your current health insurance, nothing changes, except your costs will go down by as much as $2,500 per year.”

Follow Josh on Twitter: @josharchambault

Crossposted on Pioneer Institute Blog

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