One of the odd features of the debate on the pending federal health care bill has been the lack of discussion of the effects similar reforms have had on the state level. Many of the key provisions in the Democrats plan, banning insurance companies from denying care based on pre-existing conditions (”guaranteed issue”), mandating that everyone buy health insurance, etc., have already been tried on the state level, and have been found wanting.
For example, when Washington (the state) enacted such reforms in the mid 1990s, results were less than desirable :
Some premiums increased as much as 78% in the first three years of the reforms—or 10 times medical inflation—according to a study presented at the annual meeting of the Association for Health Services Research in 1999. Other results included a 25% drop in enrollment in the individual market, and a reduction in services offered. Within four years, for example, none of the state’s major carriers offered individual insurance plans that included maternity coverage.
A 2008 analysis by Kaiser Permanente’s Patricia Lynch published by Health Affairs noted that in addition to Washington and New York, the individual insurance markets in Kentucky, Maine, Massachusetts, New Hampshire, New Jersey and Vermont “deteriorated” after the enactment of guaranteed issue. Individual insurance became significantly more expensive and there was no significant decrease in the number of uninsured.
Similarly, when one former Obama speechwriter moved from D.C. to Massachusetts, she found herself unable to afford insurance due to the horrendously high premiums :
In D.C., I had a policy with a national company, an HMO, and surprisingly I was very happy with it. I had a fantastic primary care doctor at Georgetown University Hospital. As a self-employed writer, my premium was $225 a month, plus $10 for a dental discount.
In Massachusetts, the cost for a similar plan is around $550, give or take a few dollars. My risk factors haven’t changed. I didn’t stop writing and become a stunt double. I don’t smoke. I drink a little and every once in a while a little more than I should. I have a Newfoundland dog. I am only 41. There has been no change in the way I live my life except my zip code — to a state with universal health care.
Premiums in Massachusetts are the highest in the nation, and continue to grow at a rate faster than the nation as a whole (insurance companies in the state recently announced plans for a 10% increase in premiums next year). It is often argued that the high per capita spending on health care in the U.S. relative to other developed countries proves the inferiority of our health care system. If so, then the Massachusetts experience ought to rule out many features of current Democratic proposals.
Ironically one obvious fix, allowing individuals to buy health insurance across state lines, does not seem to be on the table. A recent study found that allowing interstate health insurance would reduce the number of uninsured by about 12 million, and it would also help reduce premiums for those who already have insurance, as previously protected firms would be forced to compete with each other for customers. And while some policies may be less than ideal, one wonders if the typical health insurance coverage in, say, D.C., is so hellish that people in Massachusetts or other states are better off not having insurance at all.
