NCPA - National Center for Policy Analysis

Massachusetts Health Care Law Does Not Curb Costs

August 22, 2011

Five years after Gov. Mitt Romney signed Massachusetts' groundbreaking health care legislation, it has met its chief goal of extending insurance coverage to most residents -- but with costs rising faster than inflation, lawmakers face the challenge of how to pay for it all.  Although the law has extended coverage, it has done little to fundamentally change the way consumers shop for health care, which analysts say is the only lasting solution to ballooning costs, reports the Washington Times.

  • Massachusetts' uninsured rate plunged to the lowest in the nation, from 6.4 percent to 1.9 percent, after the law was enacted in 2006.
  • The rest of the nation averages close to 17 percent.
  • At the same time, health care premiums continued to outpace inflation by rising an average of 5 percent to 10 percent each year.

Reforming health care in Massachusetts -- and the challenges that came with it -- foreshadowed President Obama's health care initiative, which he signed into law last year.  The Affordable Care Act closely mirrors Mr. Romney's overhaul, leaving in place the employer-coverage model but expanding subsidized coverage.

  • Both laws include mandates on individuals to purchase health insurance or pay a fine, and on businesses to offer insurance, though they exempt small firms.
  • Both establish insurance exchanges that offer subsidized coverage to low-income individuals and families and ban insurance companies from rejecting individuals with preexisting conditions.
  • Now, both plans face questions over how to pay for their reforms over the coming decades.

Source: Paige Winfield Cunningham, "Health Coverage, Rates Rise in Massachusetts," Washington Times, August 16, 2011.

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