THE MASSACHUSETTS PLAN DOES NOT CONTROL COSTS

June 16, 2010

When Massachusetts launched its health care reform program in 2006, it already had the highest medical costs in the nation.  Today, the burden is still rising far faster than wages or inflation, from those already lofty levels, says Shawn Tully, a senior editor-at-large with CNN.money. 

A report from the Mass. attorney general in March asked rhetorically, "Can we expect the existing health care market in Massachusetts to successfully contain health care costs?"  The report concluded, "To date, the answer is an unequivocal 'no.'" 

Costs are rising relentlessly for both families and for the state government, explains Tully: 

  • The median monthly premium for family plans jumped 10 percent from 2007 to 2009 to $14,300 -- again, that's a substantial rise on top of an already enormous number; for small businesses, the increase was 12 percent.
  • In 2006, the state spent around $1 billion on Medicaid, subsidies for medium-to-lower earners, and other health care programs; today, the figure is $1.75 billion; the federal government absorbed half of the increase. 

Health reform's proponents boast that expenses have risen only $354 million or around 6 percent a year.  But the real increase is double that, when the federal share is included.  And it's highly possible that given the current budget pressures, the United States will reduce the contribution that has encouraged the state to spend so lavishly, says Tully. 

Source: Shawn Tully, "Five painful health care lessons from Massachusetts," Fortune, June 15, 2010. 

For text:

http://money.cnn.com/2010/06/15/news/economy/massachusetts_healthcare_reform.fortune/

 

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