Since 2006, Massachusetts has had a State managed healthcare system nearly identical to the healthcare bill that just passed into law. During the debates I had suggested that people take a long hard look at existing State health systems because every State that has meddled in healthcare has experienced crippling difficulties. While several States have attempted this, Massachusetts was the one that had nearly everything the Senate bill featured. The exchange; the subsidies and most importantly, it had an individual mandate requiring all residents to purchase an acceptable insurance plan or face a penalty.
The first effect Massachusetts felt was that individuals that had the money, desire and an idea to create a business began slipping across the borders into neighboring States to avoid the increased taxes and regulations imposed after the implementation of “Commonwealth Care”, the Massachusetts healthcare plan. As the plan began to mature and more of the uninsured obtained insurance either purchased to satisfy the mandate or provided through subsidies for the impoverished, the number of uninsured dropped to the lowest in the nation at just around 4%. Unfortunately, Massachusetts did nothing to make the prospect of practicing medicine in the Bay State any more palatable than it was before everyone had insurance so there was a measurable doctor shortage almost immediately. Wait times to see doctors have become frustratingly long and the extra burden placed on primary care physicians has taken a toll on the quality of care which were two things that voters had been assured would never happen.
The other thing that the people of Massachusetts were assured was that the cost of obtaining health insurance would finally be reigned in but that too, would turn out to be just another broken promise. The fact is that the cost of insurance in Massachusetts that was already the highest in the nation continued to climb at a staggering 10% per year, well ahead of inflation. By early 2008, the “safety net” hospitals that provided care for low income people in urban areas were experiencing serious budget shortfalls due to the combination of reduced "free-care" payments from the state and low enrollment in the exchange or “Commonwealth Care”. The State had reduced payments to hospitals expecting a reduced need for hospital charity as more people enrolled in Commonwealth Care but the enrollment that took place made little difference. What the social engineers in Massachusetts did not anticipate was that the fine for not having insurance was so low that people would learn to “game” the system. You could avoid thousands in insurance premiums and pay a minimal fine of a few hundred dollars and then get insurance through the exchange later when you absolutely needed it.
Some had argued for meaningful fines associated with the refusal to purchase health insurance but the bill would never have passed with the higher fines in place. As it was, the State spent years in court defending the mandates and fines and still has legal challenges waiting in the wings. One would think that the shortages to the hospitals would be an easy fix to address and all that would be required was to have the legislature reinstitute the reimbursements for indigent care but by then, the State was facing a short term funding gap of one-hundred million dollars and needed a new three year commitment from the Federal government for an additional one and a half billion dollars or the system would be in serious trouble.
Since the referendum ballot adopted by Massachusetts severely limited the States ability to increase taxes, the State floated several ideas to increase revenues such as an additional one dollar tax on a pack of cigarettes, but none of these measures were capable of stopping the arterial bleeding endemic in Commonwealth Care. The one-hundred million dollar short term funding gap would be the good news for 2008 as the State disclosed they had a one point three billion dollar deficit, much of which was attributed to the failings of Commonwealth Care. In 2010, the portion of the Massachusetts budget consumed by health and human services is a staggering fifty percent (50%) of all State spending. In response to the growing cost to the State, Massachusetts Governor Deval Patrick has instructed the State Division of Insurance to reject any request for health insurance rate increases that exceed the rate of medical inflation. Guess what? All of the available plans requested rate increases that exceeded the rate of medical inflation and 235 of the 274 requests were denied setting the stage for a showdown between the authority of government and the independence of business in Massachusetts.
The Governor’s instruction to the State Division of Insurance amounts to a unilateral imposition of price controls on an industry already hampered by State regulations and reduced reimbursements from the State. Four of the six companies that provide insurance through the Massachusetts exchange have posted substantial losses for all of 2009, which is what prompted the requests for rate increases. The insurers responded to the Governors edict by refusing to write any new policies until the matter was addressed and immediately filed suit against the State.
On Monday, a judge in the Suffolk County Superior Court ruled against the insurers stating that the insurers must exhaust the appeals process with the Division of Insurance before seeking a ruling from the courts. Four of the insurers have already filed appeals in accordance with the judge’s decision, vowing to take the matter to the Superior Court if necessary. Facing what is in essence, a health insurance blackout, Massachusetts Insurance Commissioner Joseph Murphy ordered the protesting insurers to return to the market with acceptable price quotes by 3pm Thursday, April 15th or face fines of five-thousand dollars a day per carrier plus one-thousand dollars for every consumer that is unable to buy coverage because of the action. So far, only one carrier, Health New England, has provided the new quotes demanded by the Commissioner.
Hopefully, they can resolve this for the benefit of those that rely on their health insurance because of long term illness or emergency needs but this may turn into our first real case of “Atlas Shrugged”. Let’s face it, the Federal government may have prohibited health insurers from competing across state lines but they are national companies. The only thing the Federal prohibition does is force the largest insurers to create 50 separate companies with the administrative costs that go with them. Blue Cross-Blue Shield in Massachusetts can thumb their nose at the Governor and Commissioner and close up shop completely in that State and do all the better for it. When a train has a car with a bad wheel, they separate it from the train and keep on going and for government to attempt to force a private company to sell a product at a loss is not just foolish, but un-American.
This isn’t the only challenge Commonwealth Care has. They still haven’t been able to attract doctors that want to work under those conditions so the State is now relaxing the restrictions on nurse practitioners and allowing them to perform health services formerly reserved for licensed doctors opening the door for yet another lowering of the quality of care. Before anyone goes into a rage over my comments, I know that nurse practitioners are hard working and dedicated people worthy of praise but they are simply not doctors. If there were no distinction between the two, there would be no need to bear the expense to complete additional education and go through the rigors of licensing to become a doctor. The fact is that just the suggestion that a change in State regulations would lower the quality care to fill the shortage of doctors leaves the State open to massive new law suits. It won’t take long for savvy personal injury attorneys in Massachusetts to provide a costly link between the State’s expansion in the role of nurse practitioners and the perception that suddenly, every medical procedure that doesn’t meet the recipients expectation could have had a different outcome if a bona fide doctor performed the services.
With the similarities between Commonwealth Care and our newly passed healthcare bill I seriously doubt there can be a substantially different outcome. Since the healthcare insurers will not be able to avoid the draconian price controls that will undoubtedly be imposed within a year or two after implementation by simply moving their business to another State, the insurers will most likely be driven out of business when the money runs out. You can bet we will have the same doctor shortages, the same wait times and the same willingness on the part of the public to pay the fines until they actually need insurance; insurance that will no longer be able to exclude pre-existing conditions. It’s a little late for the hard look the media is giving Commonwealth Care and I doubt they would even be doing these stories now if Mitt Romney, the former Governor of Massachusetts wasn’t a possible Republican contender in the 2012 Presidential election. What Obama Care may eventually bring us is a resurgence of questionable home remedies as doctor services become a game to see who can survive the wait, but this is the kind of progress that Progressives bring to everything.
Paul
The first effect Massachusetts felt was that individuals that had the money, desire and an idea to create a business began slipping across the borders into neighboring States to avoid the increased taxes and regulations imposed after the implementation of “Commonwealth Care”, the Massachusetts healthcare plan. As the plan began to mature and more of the uninsured obtained insurance either purchased to satisfy the mandate or provided through subsidies for the impoverished, the number of uninsured dropped to the lowest in the nation at just around 4%. Unfortunately, Massachusetts did nothing to make the prospect of practicing medicine in the Bay State any more palatable than it was before everyone had insurance so there was a measurable doctor shortage almost immediately. Wait times to see doctors have become frustratingly long and the extra burden placed on primary care physicians has taken a toll on the quality of care which were two things that voters had been assured would never happen.
The other thing that the people of Massachusetts were assured was that the cost of obtaining health insurance would finally be reigned in but that too, would turn out to be just another broken promise. The fact is that the cost of insurance in Massachusetts that was already the highest in the nation continued to climb at a staggering 10% per year, well ahead of inflation. By early 2008, the “safety net” hospitals that provided care for low income people in urban areas were experiencing serious budget shortfalls due to the combination of reduced "free-care" payments from the state and low enrollment in the exchange or “Commonwealth Care”. The State had reduced payments to hospitals expecting a reduced need for hospital charity as more people enrolled in Commonwealth Care but the enrollment that took place made little difference. What the social engineers in Massachusetts did not anticipate was that the fine for not having insurance was so low that people would learn to “game” the system. You could avoid thousands in insurance premiums and pay a minimal fine of a few hundred dollars and then get insurance through the exchange later when you absolutely needed it.
Some had argued for meaningful fines associated with the refusal to purchase health insurance but the bill would never have passed with the higher fines in place. As it was, the State spent years in court defending the mandates and fines and still has legal challenges waiting in the wings. One would think that the shortages to the hospitals would be an easy fix to address and all that would be required was to have the legislature reinstitute the reimbursements for indigent care but by then, the State was facing a short term funding gap of one-hundred million dollars and needed a new three year commitment from the Federal government for an additional one and a half billion dollars or the system would be in serious trouble.
Since the referendum ballot adopted by Massachusetts severely limited the States ability to increase taxes, the State floated several ideas to increase revenues such as an additional one dollar tax on a pack of cigarettes, but none of these measures were capable of stopping the arterial bleeding endemic in Commonwealth Care. The one-hundred million dollar short term funding gap would be the good news for 2008 as the State disclosed they had a one point three billion dollar deficit, much of which was attributed to the failings of Commonwealth Care. In 2010, the portion of the Massachusetts budget consumed by health and human services is a staggering fifty percent (50%) of all State spending. In response to the growing cost to the State, Massachusetts Governor Deval Patrick has instructed the State Division of Insurance to reject any request for health insurance rate increases that exceed the rate of medical inflation. Guess what? All of the available plans requested rate increases that exceeded the rate of medical inflation and 235 of the 274 requests were denied setting the stage for a showdown between the authority of government and the independence of business in Massachusetts.
The Governor’s instruction to the State Division of Insurance amounts to a unilateral imposition of price controls on an industry already hampered by State regulations and reduced reimbursements from the State. Four of the six companies that provide insurance through the Massachusetts exchange have posted substantial losses for all of 2009, which is what prompted the requests for rate increases. The insurers responded to the Governors edict by refusing to write any new policies until the matter was addressed and immediately filed suit against the State.
On Monday, a judge in the Suffolk County Superior Court ruled against the insurers stating that the insurers must exhaust the appeals process with the Division of Insurance before seeking a ruling from the courts. Four of the insurers have already filed appeals in accordance with the judge’s decision, vowing to take the matter to the Superior Court if necessary. Facing what is in essence, a health insurance blackout, Massachusetts Insurance Commissioner Joseph Murphy ordered the protesting insurers to return to the market with acceptable price quotes by 3pm Thursday, April 15th or face fines of five-thousand dollars a day per carrier plus one-thousand dollars for every consumer that is unable to buy coverage because of the action. So far, only one carrier, Health New England, has provided the new quotes demanded by the Commissioner.
Hopefully, they can resolve this for the benefit of those that rely on their health insurance because of long term illness or emergency needs but this may turn into our first real case of “Atlas Shrugged”. Let’s face it, the Federal government may have prohibited health insurers from competing across state lines but they are national companies. The only thing the Federal prohibition does is force the largest insurers to create 50 separate companies with the administrative costs that go with them. Blue Cross-Blue Shield in Massachusetts can thumb their nose at the Governor and Commissioner and close up shop completely in that State and do all the better for it. When a train has a car with a bad wheel, they separate it from the train and keep on going and for government to attempt to force a private company to sell a product at a loss is not just foolish, but un-American.
This isn’t the only challenge Commonwealth Care has. They still haven’t been able to attract doctors that want to work under those conditions so the State is now relaxing the restrictions on nurse practitioners and allowing them to perform health services formerly reserved for licensed doctors opening the door for yet another lowering of the quality of care. Before anyone goes into a rage over my comments, I know that nurse practitioners are hard working and dedicated people worthy of praise but they are simply not doctors. If there were no distinction between the two, there would be no need to bear the expense to complete additional education and go through the rigors of licensing to become a doctor. The fact is that just the suggestion that a change in State regulations would lower the quality care to fill the shortage of doctors leaves the State open to massive new law suits. It won’t take long for savvy personal injury attorneys in Massachusetts to provide a costly link between the State’s expansion in the role of nurse practitioners and the perception that suddenly, every medical procedure that doesn’t meet the recipients expectation could have had a different outcome if a bona fide doctor performed the services.
With the similarities between Commonwealth Care and our newly passed healthcare bill I seriously doubt there can be a substantially different outcome. Since the healthcare insurers will not be able to avoid the draconian price controls that will undoubtedly be imposed within a year or two after implementation by simply moving their business to another State, the insurers will most likely be driven out of business when the money runs out. You can bet we will have the same doctor shortages, the same wait times and the same willingness on the part of the public to pay the fines until they actually need insurance; insurance that will no longer be able to exclude pre-existing conditions. It’s a little late for the hard look the media is giving Commonwealth Care and I doubt they would even be doing these stories now if Mitt Romney, the former Governor of Massachusetts wasn’t a possible Republican contender in the 2012 Presidential election. What Obama Care may eventually bring us is a resurgence of questionable home remedies as doctor services become a game to see who can survive the wait, but this is the kind of progress that Progressives bring to everything.
Paul
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