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Report: Mass. Health Coverage Law Not A ‘Budget Buster’

BOSTON — Outside Massachusetts, talk show hosts and politicians frequently blast the state’s health coverage law as a “budget buster.”

“It has been an abject failure,” Sen. Rick Santorum told the audience during a presidential primary debate in January, directing his comments toward former Massachusetts Gov. Mitt Rommey. “He’s stood by the fact that it’s $8 billion more expensive than the current law.”

That’s just one of the myths the Massachusetts Taxpayers Foundation (MTF) hopes to debunk with a report out Friday. The facts will help. Michael Widmer, president of the MTF, says the state has spent just $91 million more a year since 2006 to cover the uninsured, than it was spending before the law passed.

“That’s a very tiny additional costs to taxpayers for huge benefits,” argued Widmer. “No way can one say that this has been anything close to a budget buster. The facts put a lie to this myth.”

Now keep in mind that Massachusetts was already spending roughly $1 billion per year on care for uninsured residents who received free care at hospitals and clinics. Much of that money, plus the additional $91 million per year, now funds free and subsidized health coverage for low- and moderate-income residents. Before the law passed, Widmer estimated that expanding coverage would cost the state $100 million more a year, “and we were pretty much right.”

So does Widmer think his facts will stop critics, most of whom he says are outside the state?

“No, I’ve been around too long to think it will actually bust the myth,” Widmer said, “but I hope it will help.”

MIT economist Jon Gruber says the report should prove that the Massachusetts model is both efficient and effective.

“If you believe the government has a role in helping improve the health of our society, then this is a really small amount of money to pay to do it,” Gruber said. “And in fact there is no cheaper way to do it.”

“I don’t think we learn that from this report,” countered Douglas Holtz-Eakin, president of the American Action Forum and an adviser to Republican leaders as they craft alternatives to President Obama’s health care law, in the event that the U.S. Supreme Court declares all or part of it unconstitutional.

Holtz-Eakin says proving that something works in Massachusetts doesn’t mean much for the rest of the country.

“Massachusetts was already a very high-cost state,” Holtz-Eakin said. “Massachusetts had already covered most of its citizens and has a small number of hospitals and providers it needs to control. So we can’t really just extrapolate from Massachusetts to find out what happens in the U.S.”

The real challenge, says Holtz-Eakin, is figuring out how to deal with health care costs, which are busting local, state and federal governments. Gov. Deval Patrick agrees that controlling costs must be the next chapter in health care reform.

“I’m proud of the fact that we have moved on to that second chapter now,” Patrick said. “That’s the reason premium increases have slowed and we want to keep that going and we want to sustain.”

The governor filed his prescription for controlling health care costs more than a year ago. House and Senate lawmakers are promising their versions will be out soon, but time is running short for such a major bill. This year the Legislature stops meeting in formal sessions at the end of July.

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  • Mumtothree

    What about the outrageous increase in premiums for the Connector’s Commonwealth Choice customers?  18% increase for our family.  Looks like the state is balancing the budget on our backs.

    • RDW

      Exactly right! Martha Bebinger makes no mention of Massachusetts’ soaring health insurance rates for individuals and businesses, a topic on which she has reported previously. She states that the cost of insuring the uninsured has “only” added 1% to the state budget; that is, 1% of the entire state budget, or about 9% of uninsured health care cost before reform. But health insurance reform was supposed to save money, remember? Furthermore, she tells us that the Federal government is significantly subsidizing Massachusetts health care. The biggest subsidy, though, comes, as Momtothree observes, from cost shifting to private insurance rate payers.

      • The OC 222

         Massachusetts’ (and the nation’s) health insurance rates were already soaring long before the health care reform bill.  Covering the uninsured is not the reason health care premiums and costs are increasing.  If that were the case, how would one explain why costs were rising so dramatically in the years before the new law?

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