Romneycare: Pros and Cons

The Economist published an interesting article recently that laid out the pros and cons of Mitt Romney’s healthcare reform package in Massachusetts.

Here is my brief summary of them:

Pros

  • 63% of Massachusetts residents support the law
  • Only 1.9% of residents lacked health insurance in 2010

Cons

  • Average monthly premiums increased by 12% between 2006 and 2008
  • 20% of working-age adults have trouble finding a doctor to attend them
  • Only 3,644 workers bought coverage on the state’s exchange via their employers
  • The subsidized health program’s costs were 32% and 11% above projections in 2008 and 2009, respectively
  • Costs for MassHealth, a program for the poor, rose by 40% from 2006 to 2010
  • Uninsured hospital visits increased 14% in 2010

The bottom line seems clear.

The law is popular and appears to have succeeded in extending insurance coverage to most Massachusetts residents. However, it does not seem to have contained costs. The opposite case seems more likely.

About Sean Patrick Hazlett

Conservative clean energy crusader, national security hawk, financial analyst, engineer, and former military officer.
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17 Responses to Romneycare: Pros and Cons

  1. jackdemprich says:

    It is one tough situation this healthcare debate. Give everyone coverage and there is not enough doctors. leave it alone and our emergency rooms fill up and everyone’s insurance rates go up. I don’t think we will see a clear path to this sittuation for some time.

  2. How do cost increases in Massachusetts compare to cost increases elsewhere in the country? Given that costs are skyrocketing everywhere, the fact, standing alone, that costs have increased in Mass doesn’t tell us much, I don’t think,

    • Reflectionephemeral,

      Your point is totally valid. Unfortunately this particular article from The Economist did not contain comparative statistics. Another relevant data point from the article is that before Romneycare, I believe healthcare premiums were already 27% higher in MA.

      If premiums increased less than the national average, the program would be a more attractive one. I just don’t currently have the data to point either way.

  3. Scott Erb says:

    I need some context for those comparisons. If the cost increases were similar to what was happening in other states, it does support your conclusion that it didn’t contain costs, but did not necessarily cause them to increase. The other stats also could benefit by comparisons to other states, and with Massachusetts before and after the plan (e.g., how many people had trouble finding a doctor before the plan was put into effect).

    A quick net search suggests that health insurance premiums rose dramatically nation wide during those years, perhaps more than the 12%. I haven’t had time to really test the accuracy of the info, here is one graph: http://facts.kff.org/chart.aspx?ch=157
    On that graph the difference between 2006 and 2008 for family coverage. This graph shows similar change: http://www.epi.org/economic_snapshots/entry/state_of_working_america_preview_a_staggering_rise_in_health_insurance/

    This page has some actual cost figures, though the graph doesn’t give them exactly: http://www.healthinsurancecompanies.org/costs

    It appears consistent with the cost increases in Massachusetts. It also shows from the 90s how the annual increase in premiums for families has been over 8%, which is pretty steep, especially over such a long period! If Massachusetts has cost increases in line with the rest of the country, but has the benefits of insuring everyone and popular support, the plan does seem a net positive. But to really address the underlying problem costs have to be contained.

    • Scott,

      Unfortunately, I haven’t been able to find clear comparative data either. I’m sure though that as the Republican primary goes into full swing, Mitt Romney will be forced to muster the relevant statistics. It should be interesting to watch.

  4. pino says:

    63% of Massachusetts residents support the law

    It would be interesting to see what % of the state is receiving subsidized health care. For example, I would be willing to bet that at least 52% of Americans support the current Federal Income Tax code. This coincides with the % of Americans that either don’t pay Federal Income tax OR actually get money back.

    Only 1.9% of residents lacked health insurance in 2010

    THAT is an impressive result.

    My main concerns, excepting the restriction of Liberty thing, would be costs and availability. Much as the fellas above have mentioned it’s important to compare the rise in policies against the rise in other states. In addition, it’s important to point out that the programs subsidizing policies and care for the poor are WAY higher than expected. I expect that cost to continue to outpace expectations. It’s been that way for every single entitlement program since we’ve begun to initiate ‘em.

    The other problem is that services will continue to be rationed by time. I would expect that as more and more people enter the system with less and less compensation for existing facilities, those facilities will not keep pace with the demand. And in fact, will fall behind as they simply leave the market and do something else that smart people can do and still make money.

    In the end, the question on cost has to be answered. What cost are we willing to bear to insure everyone when they wouldn’t choose to insure themselves?

    Would we pay $2.00 per citizen?
    Would we be willing to ay $22.00 per citizen?
    How about $122.00 or even 1022.00 per citizen?

    At what point do you admit that the cost is just too high?

  5. Alice Rennie says:

    I live in MA, and I believe the reason the law’s costs for the state have been higher than expected is that the economy tanked, so more unemployed people have gotten subsidies. Having been here a long time, I’d say personally, getting an appt. with a primary care doctor seems about the same, but I don’t live in Boston or an area with a large influx of newly insured folks. We knew when the plan passed that its focus wasn’t cost containment, but getting everybody covered. Our premiums were rising very fast both before and after the new law kicked in.So now for the heavy lifting – figuring out how to keep cost increases with-in reason. Our family has to pay for our premiums 100% out of pocket, so we are VERY anxious to see increases abate!

    • Alice,

      Does Romneycare require everyone to have health insurance like the federal law does? Frankly that is the only part of the federal law that will actually help reduce cost, because it increases the size of the risk pool and eliminates adverse selection problems.

  6. Great coverage of this issue Sean, and commentators, though the bottom line is kind of frustrating. The current system sucks, on cost which is causing all kinds of problems. But it isn’t clear that the alternatives (or at which one) are better on this front.

    It seems that there are a wide variety of different systems in other nations. They mostly have lower cost, and often better results for health than found in the US.

    My hope is that in making the ACA (Obamacare) law (at least for now) this issue has been elevated till we will find out way to a better system. If so I think Barack Obama will have at least one accomplishment. If the ACA is repealed, I would hope we don’t just end up with the status quo continued as we did in during the Clinton administration. But if it continues in its current form, I think it will take us over the budget cliff.

    • “My hope is that in making the ACA (Obamacare) law (at least for now) this issue has been elevated till we will find out way to a better system.”

      I think this was always Bill Clinton’s strategy — pass something, anything and then let the Congress sort out the good and the bad over time.

  7. sam sanders says:

    I was just surfing for some minimally biased info on romneycare to see how it was fairing and found this blog. I initially chuckled when I saw the name of this blog. Usually when someone names themselves something, they are often the exact opposite (e.g., the “no spin zone”). But, I read this blog and I am now filled with hope that discussions of the future about our serious social and financial issues can be rational. Health care is, obviously, a complicated issue. Admitting our current system not sustainable is a great start. What is interesting is, we already have socialized medicine. It’s called, “the emergency room.” Not a very cost effective program. In addition, HMO’s are subsidized by the government, so, we are already in the “socialized medicine” game. We just don’t acknowledge it. Borrowing ideas from other countries that have successful health care programs and learning from their mistakes is a good place to start. Unfortunately, as many of you in this discussion acknowledged, it’s hard to get accurate information from which to launch a rational discussion.

    I’m in construction and most of the guys I know just get all screamy when I try to talk about this problem from a rational perspective. Thank you all for your efforts to change the tone of the national conversation. Hopefully, you will not have to qualify yourself as a “rational” republican for much longer. Maybe people from all perspectives will see the advantage of having rational discussions. I won’t hold my breath, but I commend you all for being part of the solution. I will be visiting this site again.

    • Thanks, Sam. I appreciate the kind words. I worry that the wing nuts of each party are dominating the discussion. I am just doing my best to find pragmatic solutions to many of our nation’s problems.

      I look forward to your following my blog.

  8. Pingback: Repeal Obamacare? | Brucetheeconomist's Blog

  9. Jon says:

    The system before Romney/Obama-care was a mess and; the current system now, is a mess… The main problem with Romney/Obama-care is that tax payers are forced to pay for the un-insured.
    Additionally problematic is Romney/Obama-care causing companies of all sizes having their health insurance premiums raised; 35% to 50% causing companies to leave Massachusetts or substantially cut the size of their company. Romney/Obama-care must be repealed sooner than later due to incredibly high costs and deadly effect on the economy. Tax payers can’t afford to pay for the un-insured and; should not have to.

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