Wednesday, May 18, 2011

Massachusetts En Route to Single-Payer Health Care

Mitt Romney has thorwn himself in front of a buzzsaw with his continuing defense of his 2006 health reform in Massachusetts.  The other day, the Wall Street Journal editorial board sharply criticized Mr. Romney's approach.  In a letter by yours truly that the WSJ published today, I noted another problem with the Massachusetts reform: It amplified political incentives that have put the solvency of Bay State health plans at risk.  Read the letter here.

For non-subscribers, the text is copied below:
Your editorial's criticism of Mitt Romney's 2006 Massachusetts health law is correct in that taxes, costs and political interference in medical decisions have all gone up while access to medical care has deteriorated ("Obama's Running Mate," May 12). The Massachusetts law also jeopardizes the very solvency of private health plans in the Bay State.

Because it was politically intolerable to allow premiums to rise in line with the costs of RomneyCare, the state's insurance commissioner denied 235 of 276 rate increases in April 2010. For a short time, no new policies were offered and plans suffered significant losses. The next month, Blue Cross Blue Shield of Massachusetts, the state's largest carrier, announced a $55 million provision for anticipated losses in the second quarter alone. Of the 12 largest carriers, five were already operating at a loss. At this point, even if the state allows Blue Cross Blue Shield of Massachusetts to increase rates in line with medical costs, my analysis concludes that the carrier will become insolvent somewhere around 2017.

Gov. Romney did not give Massachusetts "universal" private health coverage. He put it on a glide-path to a single-payer, government-monopoly health system.

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