Massachusetts Reform 'Train Wreck' Shows Fatal Flaws in Obama Care

Written by Leigh Page | July 07, 2010

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Massachusetts's healthcare reform law, now in a "train wreck," shows the fatal flaws of the federal healthcare reform law because the two are basically the same legislation, according to an opinion piece in the Wall Street Journal.

A key feature of both laws is a mandate requiring everyone to buy health insurance. The federal mandate starts in 2014 but the Massachusetts mandate is already in effect. A new study by the state of Massachusetts found the number of people buying insurance only when they are about to incur major medical costs, then dumping coverage, has quadrupled since the Massachusetts law went into effect in 2006.

In a new paper, three economists found the Massachusetts plan has increased private employer-sponsored premiums by about 6 percent. Evidently to offset these increases, the state has recently been keeping premiums artificially low, rejecting 235 of 274 requests for premium increases submitted by insurers.

Due to these actions, the state's five major insurers have lost a total of $116 million so far and three of them are now under administrative oversight due to financial problems.

A state appeals board recently reversed some price controls the state set on the insurance industry and the insurance commissioner wrote that the state has implemented "artificial price caps on HMO rates" that "have no actuarial support." He added: "This action was taken against my objections and without including me in the conversation."

Jon Kingsdale, formerly an official in the Massachusetts healthcare reform effort and now expected to join the federal effort, said universal coverage was "fundamentally a political strategy question," a way of saying, "Now, you have to do with less."

Read the Wall Street Journal opinion piece on healthcare reform.

Read other Becker's coverage on healthcare reform:

Up to 20M New Medicaid Recipients Under Reform Will Face Access Problems

Five More States Joining Health Reform Lawsuit, Bringing Total to 18

Healthcare Reform: A Brief Analysis on How it Impacts ASCs and Physician-Owned Hospitals - 10 Observations

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