Tag: "Massachusetts"

Who Will Bear the Cost of ObamaCare? The Employees

[T]he great bulk of the cost of newly offered coverage will come, not out of profits or hiring, but out of worker cash wages. That is what happened in Massachusetts when “RomneyCare” was implemented. While there was little impact on the overall labor market, there was a striking change for those workers who gained new insurance: they saw wage reductions (relative to the trend) of almost precisely the cost of health insurance to their employers. Adding further evidence for the power of the employer side of the labor market to adjust in the face of an individual as well as an employer mandate, the number of employers offering health insurance actually increased following reform.

By Mark Pauly, et al.

Massachusetts Update

The untold story of the Massachusetts reform is that the small business community has been paying more for health insurance since the commonwealth’s 2006 reform merged sicker individuals into the same risk pool. The legislature has only made matters worse by passing 12 additional mandated benefits since 2006, a cost borne completely by small companies and individuals.

Now the future looks even bleaker for small business. Not only will their highest-in-the-nation premiums go up because of these new [ACA] regulations, but they will be paying on average $8,000 per family, per plan more in taxes over the next ten years.

More from Josh Archambault.

Medicaid Expansion: Who Wins? Who Loses?

Calculations by the Heritage Foundation via the Urban Institute:

  • 40 of 50 states are projected to see increases in costs due to the Medicaid expansion.
  • The majority of states see costs exceed savings when the federal match rate is lowered after the first three years. From there, state costs continue to climb, dwarfing any projected savings.
  • State savings are concentrated in large states. New York is estimated to see $33 billion in savings, while Massachusetts is estimated to save $6 billion over 10 years.


Recreating Neanderthals, and Other Links

If we can clone a Neanderthal, should we?

Is the ACA penalty for being uninsured too low? For the average person, ObamaCare’s penalties are larger than the Massachusetts mandate.

Did you know that Medicaid pays for abortions? HT: Jason Shafrin.

Among developed countries, the smaller government spending is as a percent of GDP, the higher the per capita income.

Brad DeLong Sees the Light

Massachusetts has been walking down this exchange-and-public-program-expansion road for six years now, since Mitt Romney signed RomneyCare. Massachusetts has been vacuuming up doctors and nurses from Costa Rica and elsewhere and still has been finding that the cost of treating your state population is higher when 97% are insured than it was when 88% were insured. And there aren’t enough loose doctors and nurses in the rest of the world for the ACA [Affordable Care Act] to vacuum up enough of them to meet the needs of not 1 state but 50 states.

…What is your guess as to what will happen if the ACA works for access, works for quality, works for coverage — but the extra health-care workforce needed isn’t there, and the lines start to get longer.

More. Pointer from Tyler Cowen via Arnold Kling.

What Will Newly Subsidized (ObamaCare) Insurance Look Like

We have previously reported that subsidized insurance acquired in the health insurance exchange in Massachusetts pays providers only slightly above Medicaid rates. As a result, newly insured Massachusetts residents have limited access to care.

In general, they seem to be going to the same providers (e.g. community health centers, hospital emergency rooms, etc.) they were seeing before health reform.

A new poll of hospital executives reveals that ObamaCare exchanges may produce similar results:

Providers say they worry whether the exchange networks will truly serve the uninsured and broaden the risk pool. Instead, they could result in a huge shift of people currently covered by employer — sponsored coverage into the exchange products marked by narrower networks, less choice, and rates that fail to cover the provision of high-value health care…

56 percent said they would have to make substantial cuts to operating costs or “do something drastic” if Medicaid — level rates prevail for the exchange networks while 11 percent said they would likely decline to participate or simply “go out of business.”

There is No free Lunch in Massachusetts

This is from an NBER Working Paper:

Relying on the reform implemented in Massachusetts in 2006, we estimate the empirical analog of our model. We find that jobs with ESHI [employer sponsored health insurance] pay wages that are lower by an average of $6,058 annually, indicating that the compensating differential for ESHI is only slightly smaller in magnitude than the average cost of ESHI to employers. Because the newly-insured in Massachusetts valued ESHI, they were willing to accept lower wages, and the deadweight loss of mandate-based health reform was less than 5% of what it would have been if the government had instead provided health insurance by levying a tax on wages.

In other words, health insurance costs come out of the workers’ pockets, not the employer’s. See our previous posts here and here. HT: Jason Shafrin.

Massachusetts Uninsured

A recent study in the New England Journal of Medicine takes a close look at the remaining uninsured in Massachusetts and wonders what can be done about them.

The study, authored by John Graves and Katherine Swartz, begins by noting –

It is estimated that between 2006 and 2009, the proportion of low-income Massachusetts adults who lacked insurance coverage decreased by one sixth, while the proportion in similar states barely changed — a substantial achievement by any measure.

Well, not really. A reduction of one-sixth doesn’t seem like much of a whoop given the amount of money and attention that has been spent on this program.

Read More » »

Mandated Health Insurance in Massachusetts Comes Out of Employee Wages

An NBER Working Paper  estimates that people who gained employer-supplied health insurance as a result of the Massachusetts mandate saw their wages fall by $6,055 per year, an amount only “slightly smaller in magnitude than the average cost of [employer supplied health insurance] to employers.”

Was it worth it? The authors estimate that workers value the coverage at only about 76 cents for every $1.00 their employer was required to spend. This implies that employees are worse off by more than $1,500 per year, on the average.

Once People Have Health Insurance, They Will Seek Care…

At the emergency room!

New research in the Archives of Ophthalmology warns hospitals to prepare for an overload of emergency department (ED) visits after health reform kicks in. Florida hospital EDs already saw patients eligible for Medicaid jump 6 percent between 2005 and 2009, well before millions of Americans are expected to gain health insurance in 2014, reported The Tampa Tribune.

Meanwhile, approximately 68 percent of emergency physicians in Massachusetts saw an uptick in visits due to the state’s universal health plan, the model for national health reform, according to a 2009 survey, noted The News-Press.

Source: FierceHealthcare